Logistics sector in Luxembourg raising its profile | KPMG | LU

Logistics sector in Luxembourg raising its profile

Logistics sector in Luxembourg raising its profile

Few people are aware that Luxembourg has actually developed into quite an important player in the logistics sector.

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Most people know of Luxembourg as a financial powerhouse. Some know it for its international profile and as the seat of many European institutions. For others, it is one of the countries taking the lead on space-mining initiatives.

But few people are aware that Luxembourg has actually developed into quite an important player in the logistics sector. The small country is ranked second on the World Bank's international benchmark for logistics performance (LPI), with a score of 4.22, just behind industrial heavyweight Germany (4.23).

Luxembourg's government is pushing logistics as one of five prioritised areas, covering ICT, space technologies, health science and technologies, and eco-technologies.


The digital natives

The continued success of Luxembourg's logistics sector will be assured by the so-called "digital natives", according to Mathias Weinmann. Weinmann and his colleague Johannes Hesse co-founded the Young Professional Logistics Luxembourg (YPL2) network, a company and sector network looking to connect young professionals.

Weinmann is very excited about the project.

''We've been getting a lot of positive feedback from all sorts of people in the industry," he says. "A similar structure was missing in Luxembourg's logistics sector until now. We really want to get young professionals from different companies to get together, exchange ideas and drive innovation.''

The sector has been growing continuously since 2005, rising from 675 private-sector companies to almost 800. Since that year, their overall turnover has increased from 2.6 billion euros to about 4 billion in 2015. Between 2005 and 2013, investment in real assets has more than quadrupled, from 80.7 million euros to 371.9 million euros.


Space mining and robotics

Malik Zeniti, manager at Cluster for Logistics, the official body for all companies active in the sector, thinks developing expertise in robotics would not only make space mining more feasible but also change the perception logistics creates only low-value jobs.

He is convinced the development of "robotic competence centres" and the increased visibility of Luxembourg's logistics sector will raise awareness among the public and potentially attract higher-skilled talent.

"We are aware people in Luxembourg of the need to acquire new skills on our way to space," he says. "These skills could also attract other big names like Fanuc or Kuka to the country. Additionally, the salaries in our industry make sure Luxembourg remains competitive."

YPL2's Weinmann says young professionals of all sorts of backgrounds are coming increasingly to Luxembourg's logistics sector. The YPL2 initiative wants to provide them with an integrative platform that helps them to settle in right away.

''We realised there is a big gap between the experiences of the newer generation and the older one -- the things they talk about," he says. "Young people have to get the chance to close this gap and evolve in their workplace. In our view, this would be a win/win situation for companies and their young employees."


Supply-chain management

When Weinmann presented his initiative at an event a few months ago, he was approached by a member of KPMG Luxembourg in charge of supply-chain management. The idea quickly developed to team up to keep raising the network's profile.

The upcoming Supply Chain Day -- taking place on April 27 -- seemed like the perfect opportunity. The event is an open-door day in the logistics sector organised jointly by the Cluster for Logistics and the German 'Bundesvereinigung Logistik (BVL)', helping to promote the sector among the wider public.

During the Supply Chain Day, YPL2 and KPMG Luxembourg will be hosting an event with keynotes and networking opportunities at the company's offices entitled 'The logisticians of tomorrow'. Combined with a visit of Luxair Cargo earlier that day, this will be the official kick-off event for YPL2, whose representatives are hoping to get their fellow colleagues' attention. 

The University of Luxembourg also acknowledges the potential of logistics in Luxembourg, introducing a one-year Master's in 'Logistics and Supply Chain Management (LSCM)', taught in English in cooperation with MIT in Boston.

Weinmann wants students to come on board as soon as possible. That is why he is planning to offer free membership to students who, he says, often only realise networking is important once they start working.

Luxembourg's rise in the World Bank's bi-annual LPI ranking has been a reflection of the growing importance of its logistics sector. Ranked in 23rd place in 2007, the Grand Duchy's climb to second place just behind logistics champion Germany can be seen as a major success in the small country.

Across the LPI's six indicators, Luxembourg takes first place in timeliness and international shipments, fourth in infrastructure, eighth in tracking and tracing, ninth in customs and tenth in logistics competence.

Promoting its geographically central location in the heart of Europe and investing in infrastructure, the country has a good starting point to improve on its hard-won spot in the market.

For those very same reasons, the YPL2 network is not only thinking in national terms. Targeting Luxembourg and the Greater Region, it is in contact with similar initiatives in the Netherlands and Germany, trying to push the future of logistics in their neck of the woods.

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