Growth by downsizing

From the August 2017 issue.

In a timely response to the global urbanisation trend – and to still be able to operate in Europe’s increasingly locked-off cities – Schmitz Cargobull has entered the highly competitive truck body market.

With more than half of the world’s population already living in urban areas and some 1.5 million people added to the pool every week, urbanisation has become one of the most pressing issues facing the global transport and logistics community – not only in the developing world, but also in the great conurbations of Europe.

In a move to reduce noise, pollution and congestion, commercial vehicle access to cities like London, Paris or Rome is tightening by the day – with some capitals now considering a complete ban of diesel-powered commercial vehicles as we know them.
In Paris, for example, a new distribution centre is currently under construction that could dramatically reduce the amount of heavy goods vehicles allowed to travel in the city. The aptly named ‘multimodal logistics centre’ will receive freight via rail and re-distribute it using electric or hybrid vehicles only – effectively locking out truck and trailer combinations in the traditional sense. According to the Mayor of Paris, Anne Hidalgo, the €58 million project will serve as a ‘logistics gateway’ and force Europe’s transport equipment suppliers to rethink the concept of urban cargo transport from the ground up.

One such equipment specialist is German juggernaut, Schmitz Cargobull. Traditionally associated with semi-trailer design and heavy goods transport, the continent’s largest OEM reacted to Hidalgo et al.’s prompt by positioning itself as a more diversified ‘solutions provider’ capable of covering the entire mid-section of the supply chain – from leaving the factory or warehouse all the way through to home delivery.

Especially the e-commerce driven ‘final mile’ segment is coming to the fore in that context, with Schmitz Cargobull hoping to make a virtue of necessity by translating decades of experience in semi-trailer manufacturing into the design of lightweight transport equipment for urban use.
According to the German family business, the move into the highly contested segment may be bold, but without alternative: Even though Hidalgo’s logistics gateway is still under construction, many European cities are already forcing transport businesses to unload semi-trailers in the suburbs and transfer the cargo onto smaller, more environmentally friendly vehicles before it can enter residential areas.

To not lose out on the boom, the company had to react swiftly, and did so by recalibrating its Berlin plant to manufacture an easy-to-assemble rigid body kit for the OEM- and after-market. Each kit contains the panels and everything else needed to build up a dry box onto a cab chassis supplied by the likes of Volkswagen, Mercedes-Benz, Iveco and Ford.

However, Schmitz Cargobull is quick to point out that the move into the truck body market was not a rush job: the company says it conducted in-depth research into the e-commerce and home delivery market in Germany and Europe before deciding on a market entry strategy.

The results have reportedly been unambiguous. Schmitz Cargobull says German online sales have been growing eight per cent annually in the most recent past, with parcel shipments up five per cent. By 2020, some 3.8 billion online parcels will be shipped across Germany on an annual basis – that’s almost five deliveries per capita. According to Schmitz Cargobull, Germany will continue to lead the e-commerce boom, followed by Britain, France and The Netherlands. Incidentally, Italy is falling behind in the category, but could shift gears any moment.
As a direct consequence of that development, Schmitz Cargobull expects the overall light commercial vehicle segment* to grow by five per cent every year from 2014 through to 2023; and three per cent in the parcel business alone.

While many of them will be classic vans – Schmitz calculates that on an annual basis, 120,000 vans are sold in Germany alone – the corresponding need for truck bodies is expected to be substantial.

Schmitz Cargobull says some 85,000 vans are factory-built with a closed body, while 34,500 are delivered as cab chassis that still need a body fitted – which is where the OEM is hoping to come into the game. Conservative estimates indicate an annual market volume of 16,000 standard truck bodies and 4,000 refrigerated boxes, according to the company, many of which are still supplied by local small- and medium-size enterprises (SMEs).

While Schmitz Cargobull managed to set up a supply system at surprising speed – the plan is to deliver a kit containing all the necessary parts within two weeks from ordering – it reassured media representatives at the product launch that it was not aiming to “take away” any business from local SMEs.

Instead, it says it will add to their workload and provide new revenue streams, as two mechanics are needed to install a kit on a chassis in about two hours. A standard ‘V.KO DRY’ box body kit consists of a set of newly developed 20mm GRP sandwich panels with a PU foam core. The walls, including the aluminium corner profiles, are available in various shades of white, while the roof is translucent. A special sub-frame is not needed and will help transport companies keep tare weights down.

The position lights at the front and rear, as well as the third braking light, are integrated and protected in the profile. All electrical wiring is prepared at the factory. Likewise, an LED light with a motion sensor is integrated in the basic equipment inside the cargo area. The full integration of the connection profiles in the wall structure is said to reduce weight and achieves a structural rigidity that reliably meets the specifications of DIN EN 12642 Code XL. Each box will be delivered as standard with two rear doors, with a roller door available as an option.

From a sales perspective, Schmitz Cargobull has identified three ways to market – via van dealerships, body builders and its very own retail network, which has traditionally been aimed at large fleets. Up to 70 per cent of German body builders are expected to make the switch to the Schmitz Cargobull kit, with 30 per cent of them expected to remain with self-sourced panels instead.

Incidentally, the introduction of the new box kit comes around the same time as Volkswagen’s new Crafter model, which will be manufactured in a newly opened plant in western Poland – just around the corner from Schmitz Cargobull’s panel factory in Berlin. However, Schmitz Cargobull officials continue to stress that all OEMs will be able to access the product – after all, responding to megatrends like urbanisation has to be collective industry effort.
*3.5 to 6.5 tonnes.
Fast Fact

Spare parts for the new truck body range will be handled via Schmitz Cargobull’s proven EPOS online portal. The company’s network of 1,300 service stations is reportedly ready to respond to issues too, even though it has been designed with full size equipment in mind. Additional training for mechanics is underway, too, to ensure that the aftersales power Schmitz Cargobull is known for also applies to the smaller end of the market.

 

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