E-commerce is now driving global tectonic shifts in logistics.

The rapid expansion of e-commerce has created the most disruptive trend in the industrial & logistics industry, according to CBRE's recently released Last Mile / City Logistics Report, forever changing the way we think about industrial real estate and reorganizing the supply landscape. Lands end

 

The growing population of cities, combined with new age consumer behavior—driven by the millennial generation—has increased the strain on supply chains to transport items and perishables into cities within short time limits. As city logistics and the last mile become more important, metropolitan areas around the world are shifting towards a more dynamic level of transportation in order to satisfy this need.

 

Consumer expectations have shifted dramatically in recent years, and supply chains have been compelled to adjust as a result. According to CBRE study, UK millennials shop online for more than a third of their non-food purchases, and half are predicted to shop online for more than half of their non-food purchases by 2019. Because of its high-speed Internet connections and smartphone penetration, the United Kingdom is one of the leading countries in terms of online consumption. According to CBRE's Last Mile / City Logistics research, as internet speed and technology advance further afield, we will see replicated behavior from customers all over the world.

 

The demand for immediate delivery services (one-hour, one-day delivery) is growing in major cities around the world, necessitating significant supply chain optimization.

 

Innovative last-mile initiatives, such as multi-story warehouses in crowded hubs in APAC and EMEA, locker/pick-up locations, and infill service centers in the Americas and EMEA, have emerged to accommodate this demand.

 

In Europe, supply chain restructuring has resulted in an increased need for efficiency, resulting in a smaller warehouse network with larger but fewer facilities. Land suitable and zoned for industrial use is becoming increasingly scarce as a result of population increase and urbanization. In Greater London, for example, industrial land use has decreased from 8.3 thousand hectares in 2001 to 7 thousand hectares in 2015. Vertical logistics facilities are well-known in East Asian markets, where densely populated cities and a scarcity of suitable land make them a viable option. The usage of vertically organized warehouses will become a fairly inescapable component for the evolution of city logistics in densely populated European hubs and heavily populated US cities as e-commerce increases and continues to impact the market.

 

CBRE EMEA's Head of Industrial & Logistics Research, Machiel Wolters, remarked, "With the support of e-commerce, the consumer environment as a whole has significantly expanded, and this will definitely continue at a quick pace around the world. This transition is being driven by the millennial generation, and as they continue to populate metropolitan areas, industrial operators will need to adapt to the changing landscape in order to stay competitive. Securing crucial sites in and around cities is critical, and this will open up prospects for light industrial property and even retail establishments to serve as last mile facilities, in addition to spurring vertical construction solutions."