Lineas CEO: acquisition rail operator Rotterdam first step growth strategy
Lineas has taken over Independent Rail Partner (IRP), its long-term partner and an expert in first and last mile services in the Rotterdam region. With the acquisition, the originally Belgian operator wants to strengthen its presence in the port of Rotterdam and further develop it as a rail freight hub.
The acquisition of IRP is an important step in the company’s growth strategy. Lineas is investing in partnerships or acquisitions of other dynamic private players in order to “build a real backbone for rail freight transport in Europe that is the driving force for the modal shift”.
That driving force for Lineas is the Green Xpress Network, a network of rail links between economic centres in Europe. The Xpress products are used to bundle different types of loads, ranging from steel, chemical substances and consumer goods, to pallets and containers, with an inclusion of first and last mile services. As such, it wants to convince the customer to make the shift from the road to rail.
Especially in single wagon load transportation, there is still a lot to gain for rail, explains CEO of Lineas Geert Pauwels in an interview with RailFreight.com. “Customers with single wagon load cargo were moving away from rail, as the quality of the transport solution was not good enough. Long transit times, too many partners and too many hubs were among the reasons. With the Green Xpress Network we want to deliver the same quality we offer for container transport, but also for cargo types as steel and chemical substances.”
According to the CEO, the port of Rotterdam has a lot of potential in this regard. “There are many rail freight connections there, but the services for the steel and chemical industry are still limited. There is a connection to Poland, but not for all types of traffic”, he names as an example.
With the acquisition of IRP, Lineas can build upon its local expertise.“The already good cooperation between Lineas and IRP can now be further deepened and the further integration of their activities will enable them to offer customers even better solutions: shorter lead times, new operational possibilities and new Xpress connections from Rotterdam. The combination of IRP’s strong local expertise with Lineas’s European network offers customers fast, easy, reliable, end-to-end solutions between the western ports and the rest of Europe”, the company states.
Rotterdam is only the first hub Lineas has put on its radar. “We are definitely planning for more partnerships and takeovers, starting with the countries around us, such as Germany and France. We already have a presence in France, but in Germany there is still a lot to gain, we see a lot of potential there”, Pauwels said. On the shorter term, Lineas is looking at partnerships rather than acquisitions, in countries as Romania, Poland, Sweden and the UK.
What is important to note, is that growing as a company is not the goal itself, Pauwels continues. “We want to be big, yes, but more importantly, we want to be good. We want to deliver a good product, as a logistics company with local last mile solutions and a dynamic private environment. “But if this works in one place, it could also work in another place. If we can have a hub in Antwerp, we can also have this in Rotterdam. For the customer, this means he can choose between several hubs.”
At the beginning of this year, Lineas acquired an extra 60 million euros funding to boost its operations and help the company overcome the impact of the Covid-19 crisis. It experienced a 10 per cent reduction in revenues for 2020, while at the peak of the crisis, it saw its volumes decrease by 40 per cent.
The company managed to handle the situation and remain on the track of growth. Nevertheless, the financial aid was essential to ensure avoiding setbacks on its business strategy, it stated back then. “We are now in a better situation than last year”, said Pauwels. “We are seeing positive numbers. However, we are now yet on a pre-pandemic level.” The funds were partly meant to support the expansion strategy of Lineas, Pauwels explained. This has definitely helped us to continue growing.”
The Green Xpress Network of Lineas consists of daily, fast and reliable train connections between 23 European destinations. It is for all types of freight and ensures transport times that are up to 80 per cent shorter compared to traditionally distributed transport, according to Lineas. “Transport supplemented with first and last mile services drastically lowers the barrier for companies to switch to rail”, the company explains. “This is why we invest in local expertise.”
Independent Rail Partner (IRP) is an independent rail freight operator. It was founded in 2011 and is based in Zwijndrecht, the Netherlands. With a strong presence in the Port of Rotterdam and extensive coverage in the Dutch market, the company provides services for other rail freight operators. IRP employs 35 people and has a fleet of 12 locomotives.