MERGER-MANIA EXPECTED TO CONTINUE IN EUROPE

MERGER-MANIA EXPECTED TO CONTINUE IN EUROPE

The trend in multinational mergers of transportation companies was forecast to continue as distribution groups intensify their efforts to meet European shippers' demands for more integrated transport services.

Tony Stanton, president of Britain's Freight Transport Association, said Tuesday the planned removal of trade barriers between the 12 countries of the European Community by 1993, combined with the anticipated growth in trade with Eastern Europe, will add pressure for such integration.Speaking at a conference, "European Transport in the '90s," Mr. Stanton said the most progressive transport companies after 1993 "will need to provide unimodal and intermodal domestic and international services" both throughout the EC and the rest of Europe.

They will require the capacity to be totally integrated into the distribution programs of their largest customers through information technology and electronic data interchange networks.

Mr. Stanton also said they will need to provide dedicated resources, including equipment and in-house personnel, to offer inter-factory movements, stock ordering and final delivery to customers.

Dirk Goedhart, managing director of corporate forwarding for Philips International, one of the world's largest electronics groups, confirmed that his company, at least, expects to continue relying heavily on outside transporters.

Despite Philips having factories in 46 countries, 60 percent of its business is tied to Europe and 90 percent of its finished products by volume are moved in trucks. Nevertheless, "in-house road transportation services will lack the scale to compete on service and price" with independent haulers, Mr. Goedhart claimed.

In-house multinational physical distribution services are increasingly vulnerable, he said, and should be restructured to remain competitive.

In particular, multi-divisional warehousing services should be set up as ''arms-length" entities capable of taking on third-party customers because they will be underutilized as divisions modify configuration and seek stock reductions, Mr. Goedhart added.