Tag: logistics

Logistics companies need digital transformation

A report from Lux Research suggests that the transportation and logistics industries are crying out for digital transformation.

In its latest report, “The Digital Transformation of Transportation and Logistics,” Lux Research said the transportation and logistics (T&L) industry has observed steady growth for more than 10 years and now represents an over $300 billion industry.

But for it to grow further the industry has three major challenges – agility, sustainability, and visibility – and companies operating in the industry are hoping to address those challenges through digital transformation.

Lux Research Analyst and lead author of the report Harshit Sharma said that trade globalisation, digital consumers, and low oil prices have all driven growth in the T&L industry while imposing new challenges.

European retail property market stays busy

warehouse-openAlthough Europe is going through the worst economic crisis in decades, the retail property market is still showing signs of life – and it’s getting better. It is estimated that €16.3 billion of retail property was traded in the first six months of the year, up 31 percent compared to the first half of 2012.

Demand is strong and it’s coming from various sectors, with increased spending on cross-border deals. There is a lot more interest from institutional investors, including Asian funds. The focus appears to be on the more traditional shopping centre market rather than out of town locations.

Britain remains Europe’s biggest retail investment market, with an impressive market share of 32 percent. Volumes are up 94 percent over the first six months of 2012, reports Property Magazine. Other big markets are also doing well, especially in Northern Europe. Germany, Sweden, Norway, Denmark and France have all experienced a rally. Oddly enough, there is more interest in troubled markets like Greece, Portugal, Italy, Spain and Ireland. The temptation of low prices and volatility seems to be attracting risk loving investors with nerves of steel.

Michael Rodda, head of EMEA Retail Investment at Cushman & Wakefield, said some investors are starting to look further afield, while others are contemplating taking on more risk, usually via development.

“The Nordics were strong again in H1 and we expect this to continue into the second half of the year but we are beginning to see increased activity outside such core markets,” he said. There have been some notable transactions in Central and Eastern Europe for example, such as Atrium’s acquisition of Galeria Dominikanska in Poland, and there is also now real momentum building up in Iberia, where we expect to see a surge in activity as rental re-pricing looks to have bottomed out and improving availability of finance appears to be on the horizon.”

David Hutchings, Head of EMEA Research at Cushman & Wakefield, said retail property remains in demand across Europe and buyers seem undeterred by the stresses and strains of the market, and the increasing competition from online retailers.

Hutchings believes supply levels are likely to improve toward the end of the year, and investment in the retail sector is expected to increase 8 percent on 2012.

Economic turmoil wreaks supply chain havoc

supply-chain-managementThe never ending economic crisis was to blame for more supply chain disruptions last year than insolvencies and horrible weather. According to a survey by Dynamic Markets, commissioned by Oracle, more than half of major companies in Europe, the Middle East and Africa (EMEA) suffered supply chain disruptions caused by economic woes.

E-commerce generates demand for mega-warehouses

warehouse-openOnline shoppers are not just killing main street, they seem to be taking creating a lot of demand for oversized commercial storage units suitable for logistics and delivery outfits. In other words, small warehouses are going out of style, fast.

Property Magazine International reports that 25 million square meters of retail space will be needed over the next five years to keep up with e-commerce trends. That is the equivalent of 3,300 football pitches and some developers might end up driving white Bentleys, just like Premiership footballers.

It is estimated that online outfits will also need an additional three million square meters of specially equipped e-fulfilment space over the next five years. Another 22 million square meters is needed to keep retail stores and satellite warehouses stocked.

The growth of e-commerce will also drive further development of so-called dark stores, which is basically a fancy name for huge warehouses where goods are packed and shipped to consumers.
Jones Lang LaSalle executive Paul Betts argued that many retailers have simply outgrown their supply chain infrastructure and they have to work out new logistics models for multi-channel retail.

Warehouse space hits record low

forkliftRetail is hurting and the slowdown now appears to be trickling down to warehouse outfits, who are slowly running out of space. 

According to a report from Jones Lang LaSalle, the amount of warehouse space available in the UK is at its lowest level since records began. Some regions are already experiencing shortages of immediately available space.

Tim Johnson of Jones Lang LaSalle told Logistics Manager that the amount of immediately available new floor space is at its lowest level since his outfit started keeping records and it currently sits at just 8 million sq ft UK-wide.

“This is 71 per cent below its pre-recession peak of nearly 29 million sq ft in March 2008 – this definitely affected take up levels last year,” he said.

The vacancy rate in December 2012 stood at about 10 percent across the UK. Overall take-up in 2012 was lower than in 2011 due to a lower level of overall economic activity. Worse, occupier demand slowed down in 2012, but even so the amount of available space kept declining. Construction of new facilities slowed down after the 2008 meltdown and it is currently at the lowest level since 2005.

Jon Sleeman, director EMEA Logistics & Industrial Research at Jones Lang LaSalle, pointed out that the availability of good quality space is now becoming a real issue and some clients are being forced to consider alternatives, such as build to suit developments. On a positive note, he argued that some developers with infrastructure and planning in place stand to benefit from the downturn.