A more agile and sustainable supply chain thanks to centrally located warehouses

With e-commerce spend growth and consumer expectations for faster delivery, the total amount of urban kilometres travelled by distribution vehicles worldwide is expected to triple over the next thirty years, according to SHD Logistics.

While consumers want their purchases to be “greener”, many want companies to take responsibility and manage the negative impact that their deliveries could have on the environment.

The answer to the need for an increasingly flexible, fast and greener supply chain is centrally located warehouses. Today more and more companies in a wide variety of sectors seek to operate in a more central location, knowing the benefits that this choice can bring to their supply chain.

The benefits of an urban logistics hub

Centrally located warehouses operate as urban logistics hubs – a strategically located logistics facility in close proximity to large populations of people. They have been developed in response to the changing economic, social and environmental situation that companies are now operating in. Being strategically located close to urban centres and to the main transport infrastructure, these properties allow companies to provide faster deliveries to a very large pool of consumers.

According to a study by Capgemini, 55 percent of consumers would be willing to switch to a new brand for a faster delivery service. This means slower delivery can not only affect consumers overall satisfaction, it can impact business too.

 

While many consumers want faster delivery, many are unwilling to pay for it. The cost therefore falls entirely on the company. Today, transportation costs account for 50-70% of a company's logistics costs (source: CBRE) and can go so far as to erode its margins and competitiveness. Consequently, positioning your company near urban centres becomes also a way of reducing transportation costs while improving the quality of the offered service, especially now that fuel and tolls expenses keep rising.

Urban logistics hubs are beneficial for both the company, and its employees. Thanks to a more central location, which is often close to transport infrastructure, they may be able to walk, bike or take public transportation to work. This change in lifestyle can not only reduce pollution and traffic for the city, but can also provide economic as well as mental and physical health benefits.
Now that after the pandemic more and more workers are putting well-being and work-life balance first, offering a convenient and easily accessible workplace can therefore help companies with their recruiting and talent retention challenges.

 

Proximity supports sustainability

Choosing a strategically located warehouse can have a great role to play in achieving your own sustainability goals. By minimizing distance and travel time, it is possible to reduce carbon emissions and, consequently, your company's carbon footprint. Moreover, a strategic position makes it possible to invest in greener delivery, using for example cargo bikes or electric vehicles, that come with additional cost savings as well. Many companies are already choosing to go down this path and getting ahead of regulation from the European Commission and local governments.

 

Goodman's commitment to decarbonize the supply chain

At Goodman Europe, we want to provide our clients with industrial real estate solutions that can support their business and sustainability strategy. Our properties offer not only a prime location, but also cutting-edge sustainability features in terms of efficiency, performance and flexibility.

We believe that real estate can play a leading role in decarbonizing the entire supply chain if everyone does their part. This is why we have chosen to link our corporate emission reduction targets, officially endorsed by the Science Based Target initiative and based on the 1.5°C threshold, not only to Scope 1 and Scope 2 emissions, but also to Scope 3. We are therefore committed to reducing both the direct emissions linked to our corporate activities, but also the indirect ones, related to the construction of the properties and the energy consumption during their use phase to make them as sustainable as possible – for the long term.
At a time in history when companies face high volatility, we want them to be able to rely on sustainable and well-positioned properties from which to successfully address the upcoming challenges.

Stefano Fierro
Country Manager Goodman Italy

The article has been published originally on Logisticamente.it and is available here