Colliers International has published a report titled “From First Mile to Last Mile” dedicated to the global logistics services market.
– Our analysis shows that both now and in the future, the most important factors shaping the logistics sector will be e-commerce and constantly evolving delivery methods. This is due to the significant growth of retail e-commerce in small and large cities around the world – explains Dwight Hotchkiss, National Director of Industrial and Logistics Services for the USA at Colliers International. – The result of this phenomenon will be the creation of new, innovative spaces both at the initial stage, the so-called “first mile,” exemplified by giant distribution centers, and at the “last mile” stage, where there has already been a proliferation of distribution centers located on the outskirts of cities to fulfill online orders.
Colliers observes similar trends, opportunities, and challenges in the logistics sector worldwide, but points to the existence of certain additional factors specific only to the European market. One of the common trends is changes in the field of transport and cargo handling related to the launch of new deep-water facilities (terminals in Gdańsk and London, and the Seine-Nord Canal in France providing a connection to Belgium and the Netherlands), resulting from the implementation of the “four corners” strategy aimed at managing the flow of goods across the continent. This trend concerns the “first mile” stage. The second trend concerns the opposite pole, i.e., the “last mile” stage. In Europe, for example, parcel lockers are constantly gaining popularity. This is happening primarily in Germany, the Netherlands, Belgium, France, Poland, and the UK. In Poland, where the main providers of such services are InPost and Poczta Polska, about 11 percent of customers making purchases online choose to collect their goods at a parcel locker.
The Colliers report, which focuses on the huge potential for the development of logistics and warehousing services related to retail e-commerce, contains examples and case studies of modern warehouse and distribution spaces designed to solve the most pressing problems occurring in this sector. The analysis also includes conclusions regarding market implications and development opportunities for the global logistics sector.
The most important issues included in the analysis are:
• The impact of population structure and consumption levels on the future situation: Progressive urbanization will cause further concentration of consumer markets. Representatives of Generation X and Y, as well as those who reached adulthood in the new millennium, will make up an increasing percentage of the total population, which will entail a radical change in consumer behavior and needs related to logistics and storage.
• Changes in the global flow of goods: Since 2000, there has been a huge increase in containerized freight transport worldwide. The total growth of such transport in 2013 amounted to 290 percent. The pressure related to the demand for this type of service has led to the modification of trade routes to better utilize the potential of North American markets, while simultaneously reducing the importance of traditional ports, such as the one in the Los Angeles-Long Beach metropolitan area in Southern California.
• Expansion of key clusters and infrastructure: To meet growing demand, significant investments have been made in the development of new infrastructure in key clusters around the world. Investments that are currently in the planning or implementation stage are expected to significantly improve or change the logistics framework and the situation in the warehouse real estate market for many years to come.
• Expansion of “first mile” facilities: The development of retail e-commerce and the associated increase in demand for space enabling the installation of advanced technical infrastructure, such as automated picking and sorting systems, have resulted in a clear increase in total real estate area: modern distribution facilities serving the “first mile” stage occupy an area of over 90,000 sqm.
• Reduction in the size of “last mile” facilities: Given that an important element of improving logistics solutions in urban areas is ensuring the shortest possible delivery routes, e-commerce retailers have begun to use smaller warehouse facilities located in urban areas to shorten delivery routes, and thus deliver goods faster to customers shopping online. Such smaller urban facilities serving city customers, as well as various click-and-collect solutions allowing consumers to personally collect goods purchased online immediately after placing an order or on the same day, will play a leading role in the near future.
More information in the report: http://www.colliers.com/en-us/insights/market-news/2015-global-logistics-report