hen 10 new countries joined the European Union in May, Europe's geographical center moved eastward. Speculation about whether Europe's economic center, and its base for distribution of goods, also would move came to the forefront. Should the Benelux countries, located in the heart of the old E.U., worry about losing their place as the continent's distribution hub? Are Belgium, the Netherlands and Luxembourg really in danger of losing their status in the cargo world?

On the face of it, the question seems crazy. The Holland International Distribution Council estimates that more than 800 European distribution centers are established in the Netherlands alone, including such big names as Reebok, Yamaha, Xerox, Sun Microsystems, Sony, Samsung and Cisco.

The Dutch-based centers for these corporate giants are estimated to have a 51 percent share of distribution in Europe. Amsterdam Schiphol Airport, the region's biggest hub, is also on a roll. After its slots were restricted during the late 1990s, the opening of a fifth runway has led to a surge in cargo traffic, most of it from long-haul freighters. Tonnage was up 8.8 percent for the year, and is predicted to grow 5.5 percent in 2005.

In little over a year, the airport has lured Polar Air Cargo back from Liège Airport in Belgium, won extra frequencies from a range of Asian freighter operators, and attracted new freighter services from Qatar Airways and Turkey's Kuzu Cargo Airlines.

In its latest master plan, Schiphol has set aside large swathes of land for forwarder and logistics development, and has more in reserve. That carries on a tradition of trading in the Benelux that has, along with its location and government actions friendly to logistics business, made three countries relatively meager in size giants in any global supply chain that reaches Europe.

It hardly looks like a region that might see a dramatic move of business to Europe's margins. But then, recent history shows that borders, boundaries and business in Europe hardly should be considered permanent.

When in May 2004 eight Eastern European countries, along with Malta and Cyprus, joined the multinational grouping, the E.U.'s population swelled by 20 percent, or 75 million people.

Although the impact on the E.U.'s GDP was much smaller - just a 4.4 percent rise - the relocation of manufacturing to this new low-cost side of Europe has already been pronounced. Practically every big name in the automotive, pharmaceutical and computer sector has set up a factory in Poland, Hungary or the Czech Republic, where labor costs are as much as 20 percent below the E.U. average.

Will the European distribution centers, and the air cargo that feeds them, follow suit?

Singapore Airlines, which recently concentrated its European freighter activities in Amsterdam and Brussels (it has 14 flights a week at Schiphol, 13 at Brussels), has certainly thought about the subject. Lean Kian Hai, regional vice president Europe for SIA Cargo, says "new opportunities appear to exist for a hub to cover south and southeast Europe," an argument strengthened by new highway tolls in Germany. "These developments will continue to place pressure on the primary hub status of both Brussels and Amsterdam," he says.

There would also seem to be a fairly compelling case for putting new distribution centers in the Czech Republic or Hungary, the most centrally located of the new member states.

Edgar Kasteel, vice president international business development at the HIDC, admits he has heard such musings from manufacturers, and was worried enough to produce a major report on the topic: "Compass Eastwards - Assessing the impact of E.U. enlargement on pan-European supply chains."

But he was not that worried.

One reason, notes Kasteel, is that EDCs in the Benelux are closer to more end customers, the 300 million or so consumers in Western Europe who form the main market for the goods made in the East.

Delivery to the retailer or consumer, he notes, is the most time-sensitive part of any logistics operation. "Customers are very demanding and they require next-day delivery. From Hungary, you would need to do this by TNT or DHL, whereas out of the Benelux you can use trucking," he says.

Trucking, in fact, has seen major growth in Europe in recent years as border checks between countries have fallen. It's on the highways where the competition for distribution within is being fought, not in the air.

This is where many believe the Benelux region still has a key advantage.

Jan Schipper, managing director Benelux for TNT Express, estimates that as many as half the trucking companies in Europe are registered in the Benelux. Harry Tomesen, business manager cargo for Schiphol, says this is a key factor for carriers and logistics operators. "We have an enormous trucking network with daily frequencies to all these countries. That is something nowhere else can duplicate," he says.

One reason for the strength in trucking is that the region hosts one of the world's largest ports - Rotterdam.

Ideally situated at the mouth of the Rhine and a short sailing time from the Atlantic shipping lanes, Rotterdam is the point of entry for a huge share of European sea freight. Simple geography, as well its sprawling size, means Rotterdam is likely to hold onto its crown for the foreseeable future.

"You have large vessels from the Far East coming in, and it is a question how quickly you can unload them," says Willem Heeren, managing director of Dutch-based trucker Jan de Rijk Logistics. "Rotterdam has huge handling efficiency, economies of scale, and 1,000 hectares of reclaimed land to expand onto.

"Having an EDC close to Rotterdam not only means efficient supply lines for imported goods, but the ability to take advantage of the large numbers of trucks, trains and barges available to move its cargo inland.

"You can put your EDC in Strasbourg, but how are you going to get to the containers there?" asks Heeren.

Of course, Germany also has a major port and airport, and good highway access to the East.

But, notes Kasteel, Hamburg and Frankfurt are a good distance apart, unlike Rotterdam and Schiphol.

"Having a major port and airport close together is a huge advantage for the Netherlands," he says. "Companies don't just use one mode, they use both. Research we did last year said this dual capability of the Netherlands was very important to companies in siting EDCs."

Proximity of express services is also useful for EDCs, and until recently the Benelux could boast that it had two of the four big integrator hubs in Europe - DHL in Brussels and TNT in Liège. A third, UPS, is just down the road in Cologne. But in November, DHL announced it would be moving its European hub to Leipzig in Eastern Germany in 2008. Doesn't this put a dent in the Benelux's competitiveness?

Kasteel admits it was a disappointment, but says Brussels will remain a regional hub for DHL. And it is not as if the integrator wanted to move to Leipzig. It came to the decision late in 2004 following years of wrangling with the Belgian authorities over night flights.

And TNT has no intention of moving from Liège.

"From our perspective, the preferred option for a central sort hub in Europe is still in the triangle between Frankfurt, Paris and Amsterdam," says TNT's managing director worldwide networks, Christian Drenthen. "It allows us to optimize the amount of traffic we can move by road, and it puts us close to the four main airports - London, Paris, Amsterdam and Frankfurt. If based in Liège we can truck to these airports and still have excellent connectivity. We would not have that advantage in Eastern Europe."

TNT also has trucking subhubs all over Europe, including in Warsaw and Vienna. And Schipper says that helps the Benelux region because with border controls to the new E.U. countries dismantled, trucking is much easier from there to Belgium. "It has improved trucking times to the east by one to three days," he says. "That if anything makes it easier than before to have an EDC here."

Kasteel will concede that as the east develops and the E.U. expands to include other countries, such as Romania and Bulgaria, companies might look at having two EDCs in Europe rather than just one.

Heeren says that even if that happens, there is no imminent threat to the Benelux. "One might be in the south or east, but the other will still be in the Benelux. They will still want to be close to Rotterdam," he says.