This blog post takes a look at current market dynamics, the economic outlook, and the importance of consistent compliance. We also address our strategic decision to build a new hazardous materials warehouse in Moerdijk in the Netherlands. We focus on its importance in the current market environment.
The global chemical market is confronted with complex framework conditions. These include recent geopolitical events such as the Ukraine war and the corresponding negative developments on the gas market. For example, Russia’s attack has led to disruptions in supply chains and price volatility in the gas market. According to the Reuters news agency, the German chemical association VCI expects a further decline in the national chemical industry in 2023. The reasons for this are persistently high inflation, a weak global economy, the European energy crisis and regulatory problems in Germany. Accordingly, industrial production including pharmaceuticals will decline by 5 percent in 2023, while industry sales are expected to fall by as much as 7 percent, the VCI said in its quarterly report. These forecasts make it clear that the logistics infrastructure of the chemical industry must be extremely adaptable and resilient now and in the future.
In the chemical logistics market, service quality and regulatory compliance are key concerns for Leschaco. Authorities in different countries are placing increasing emphasis on enforcing strict regulations to ensure the safe transport, storage and handling of dangerous goods. For example, the European Union’s REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) and CLP (Classification, Labeling and Packaging) regulations are constantly evolving, forcing everyone in the industry to comply. Leschaco proactively tracks these changes and reliably ensures that the highest safety and compliance standards are maintained in all our operations. However, finding the right balance between regulatory requirements, current market practices, customer needs and Leschaco’s own standard expectations can be challenging. This is particularly true in the area of contract logistics and in regions where little importance is yet attached to these issues.
Leschaco’s strategic decision to build a new warehouse in Moerdijk demonstrates our long-term vision and commitment to serve the niche market of chemical logistics. This is especially true in an environment with limited warehousing infrastructure. Our state-of-the-art facility is designed to meet the specific needs of the industry and fits seamlessly into what we call our “Strategy 2030”. The Moerdijk warehouse is a cornerstone in our efforts to offer customers a comprehensive solution from a single source. In addition, Leschaco is closely monitoring the upcoming high market demand for batteries and the possibility of handling the transfer of large containers at this site. This increases the strategic importance of the warehouse in terms of smooth logistics for our customers.
Nevertheless, market researcher “TI Market Intelligence” sees signs that the inventory market is starting to cool down in the course of the year. Indications of declining activity came from two major corporations, Amazon and FedEx, which announced that they would be reducing warehouse capacity because they had made too many commitments during the pandemic years. However, vacancy rates remain at record levels, even if they are declining slightly in some regions. The warehousing market has also seen a sharp decline in the development of new warehouse space as declining volumes and rising costs take their toll. Vacancy rates will therefore tend to remain tight, which in turn will cause rents to rise by varying percentages in all areas.
In addition, the following market trends are impacting the restructuring of global supply chains for greater resilience:
Our warehouse in Moerdijk, which is scheduled to be operational in the first quarter of 2024, represents a significant investment for Leschaco. It underscores our commitment to meeting the evolving needs of the industry while meeting the demands of the market in a particularly dynamic environment. In a constantly evolving market, Leschaco thus remains at the forefront of dangerous goods logistics.
Cover image: Moerdijk by Tjeerd – stock.adobe.com