Logistics

The Future of Logistics

The rise of e-commerce, the emergence of new technologies, and the rapid shift of populations to urban areas has changed the way we receive goods, which in turn is reshaping our cities.

What is Logistics?

Logistics is the movement of freight from its origin to its final destination, from collection to transportation to distribution. Urban logistics plays a pivotal role in ensuring the livability of urban areas, due to its fulfillment of citizens needs and its induced economic impact.

History

Cities have historically had an important role in the distribution of goods as primarily logistical and production centers. Urban warehousing was an vital component of the industrial revolution, storing goods before distribution to other cities around the country. During the last half of the 20th century, distribution centers followed population and production out to the suburbs.

Late 20th Century Supply Chain

The last-mile of transportation typically facilitated through retail centers.

21st Century Supply Chain

Establishment of intercity distribution centers and "last touch" facilitates the next-day and same-day customers expect. Demand for infill logistics real estate has increased to provide better service and lower total supply chain costs.

Infill Types

There are many types of infill that can make up the "last-mile".

Underwriting

Urban logistical centers represent a shift of expenses from delivery-related to real estate. Centrally located distribution centers reduce the cost of rapid, high volume delivery within the urban core and dense surrounding neighborhoods.

(Source: Prologis)

An examination of the New York City market found that delivery costs account for 82%-92% of the total costs to complete same-day delivery for traditional distribution centers. It is at least 22 percent more cost-effective to service e-commerce demand in NYC last-mile facilities out of the Bronx versus other New Jersey locations.

(Source: Deloitte)

E-Commerce Driving Bigger Demand for Smaller Warehouses, CBRE Says

Effects

Rents for smaller urban warehouses between 70,000 and 120,000 square feet have risen by a third over the past half-decade, while availability has dropped between 7 and 11 percent.

In Paris, Ecommerce Warehouses Get a Chic Makeover

Implementation

Modern day logistics is creating new urban forms to accommodate the increase in traffic and industrial space closer to population centers. Warehouses and fulfillment centers within the city center adapted to their locations, including building up to increase density and integrating mixed-use into their structure.