November 13, 2018 Comments Off on Last-Mile Logistics Means Getting Creative Views: 720 National News

Last-Mile Logistics Means Getting Creative

In both supply-chain management and industrial real estate circles, there’s been a great deal of attention paid to the importance of last-mile delivery. But what does that actually look like? The answer, says JLL, may vary from market to market—and increasingly, demands a healthy dose of creativity.

“A national network of regional distribution centers is important, but it’s just the beginning,” according to Gillam Campbell, research manager, industrial at JLL. “The sophisticated routing of e-commerce orders through a complex series of supply chain stops is driving demand for nearly all building types and qualities of industrial real estate. With smart demographic analysis, e-commerce companies can identify urban infill locations that will serve their last mile deliveries—and it may look different in different cities.”

Ironically, the markets where such facilities are most needed may be those where they’re hardest to come by. “Warehousing isn’t seen as a priority for urban land,” according to a new JLL report, Urban Infill: The Route to Delivery Solutions. “Owners and developers can usually get higher rents from other sectors, like retail and office.”

As a result, older industrial supply is often repurposed to non-industrial uses. In Silicon Valley, for instance, about 15% of the existing industrial stock has been converted to residential and office product since 2010.

“Urban infill warehouse and distribution facilities are already extremely scarce, and conversions or redevelopment to other uses have eroded available stock’” says JLL’s Aaron Ahlburn. “Given that e-commerce sales are expected to double over the next decade, demand will only grow stronger.”

Accordingly, he adds, “last-mile distribution within dense U.S. cities requires the right location, the right space and the right price—and that calls for creativity in our industry.”

JLL’s report spotlights some of the directions in which a creative approach is headed. For example, there’s UPS’ eBike electric bike program, activated in Portland, OR and Pittsburgh (pictured). JLL notes that it both reduces harmful emissions and expedites deliveries through narrow city streets with limited parking.

Startups Flexe and Warehouse Exchange are applying sharing-economy concepts to e-commerce, the report says. Flexe connects companies that need warehousing space and services to companies that can provide them using software and a network of warehouses. In common with Airbnb, Warehouse Exchange enables warehouse users and providers to connect online.

Several major U.S. cities have launched Smart City Logistics innovations and protocols, following the lead of Europe and Asia, JLL reports. For instance, Seattle is partnering with logistics companies in the Urban Freight Lab to address the impact of frequent deliveries on everyday life.

And while the concept of multistory warehouses in urban settings has yet to catch on as widely as it has in Europe, we’re seeing a few instances already. JLL notes that in markets with high land values, such as New York City, Seattle and the San Francisco Bay Area, a handful of multistory distribution center projects are going vertical.

Download the report

Connect with JLL’s Campbell


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