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Logistics and the opportunities in technology: the future is on our doorstep

  • United Kingdom
  • Corporate Real estate - Real estate briefing
  • Real estate
  • Real estate sector
  • Transport - Logistics

23-06-2021

From dark stores to cold storage operators, the location of facilities for last mile delivery is increasingly important. ‘Micro-fulfilment centres’ are emerging in urban areas to cater specifically for online orders, aiming to increase capability and efficiency for same, or next day, delivery at lower cost. Take for example the many supermarkets across the UK that are rolling out urban fulfilment centres. Some are taking advantage of the reduced demand for customer parking spaces at existing stores (as shoppers move online) and are replacing them with new fulfilment facilities so that their local delivery vehicles can get closer to their customers.

Traditionally, large logistics facilities taking up vast areas of land have been king. However, the use of robots, and sophisticated multi-level buildings engineered to suit them, is beginning to revolutionise this “giant box” world. Constrained city centre and suburban sites are now the new frontier for logistics. .

New and disruptive technologies enhancing logistics operations give businesses the option to take these smaller urban spaces, increasing or relocating their warehouse facilities and complementing, and in some cases superseding, the old mega sites. Technology is redefining the requirements for a ‘good’ warehouse facility. The use of on-demand 3D printing may even reduce the need for warehouse space altogether, and the bricks-and-mortar retail premises now lying empty could become local 3D printing and neighbourhood fulfilment centres.

We could even see the arrival of mobile fulfilment centres with new technology opening up the possibility of products being printed inside the delivery vehicles themselves. Vans used to be made in factories. Tomorrow’s vans will be factories.

Electric and autonomous vehicles will also reduce the demand for storage space for massive fleets of delivery vehicles. Instead, falling demand for parking, petrol stations and car dealerships could free up new and valuable sites for urban logistics hubs. Delivery start-ups with cutting-edge telematics technology are entering the last-mile logistics services market to compete in providing same-day shipping service to businesses. The size of a facility may no longer be the most important consideration. For instance, changing demand in the food and healthcare industries means that efficient refrigeration set up is becoming one of the most vital criteria.

More than ever, sustainability is at the core of the sector – constantly enhanced by developing technology. Investors and developers all across the sector are competing to achieve carbon neutrality.

With competition in the logistics sector constantly intensifying, providing next-day or two-day delivery from a facility hundreds of miles away is unlikely to be sustainable long term due to consumer delivery expectations and demands. The future is much closer to our doorstep.

It is important for developers, occupiers and investors alike to seize the potential of the new technologies, and build on the expansion of e-commerce during the global pandemic, to ensure uninterrupted growth for the logistics market.