Logistics sector prepares for e-commerce revolution

Logistics sector prepares for e-commerce revolution

27 October 2017

Industrial property tenants are expecting significant change for their sector as the rise of e-commerce creates increased demand for last-mile logistics, reports the AFR.

The report is based on a CBRE survey of the sector that found a growing number of logistics providers expect their activities to change significantly due to the increasing impact of e-commerce.

Only 19 per cent of businesses that occupy industrial and logistics space have seen the impact of e-commerce in the past five years. But in the next five years, 35 per cent of logistics providers expect to see a positive impact.

The closely associated CBRE Last Mile / City Logistics Report (2017) shows that distributors are under increasing pressure to deliver consumer products and perishables within narrow times frames (such as one-hour to one-day), and this has generated significant needs for optimising the supply chain.

More than 30 per cent of major European distributors already offer one-day delivery services, and approximately 10 per cent offer same-day delivery.

As a result, distributors are increasingly moving away from warehousing that relies on regional hubs to a smaller number of distribution centres in close proximity to population centres.

Other strategies within the “last mile” include multi-story warehouses, locker/pick-up locations and infill service centres.

Big data is also playing a larger role in the last-mile challenge by providing creative solutions for industrial operators, such as driver tracking, dispatching, mobile messaging, and delivery services for multichannel retailers.

“Surveys of this kind have rarely been undertaken in the Australian industrial and logistics market, meaning there has been limited benchmarking of what drives occupiers’ decision-making,” said the report’s author, CBRE senior researcher Kate Bailey.

Of those planning to relocate, manufacturers were the most likely to want a smaller occupancy. This was possibly reflective of the shift towards high-tech manufacturing, according to Ms Bailey.

The consumer landscape as a whole has expanded rapidly with the help of e-commerce, and this will undoubtedly continue at a far more rapid rate, notes the CBRE report.

Big data and technological innovation will also allow retailers and industrial operators to better understand the needs of their consumers.

Altogether, this is creating a perfect storm for city logistics to become an even more critical component in the supply chain.

The industrial operators that find the right balance between their supply and demand fundamentals will have taken a closer look at these growing trends to create a multi-faceted last-mile strategy that keeps their customers happy and delivery costs low.

CBRE industrial logistics