Despite growing pressure on online retailers to deliver goods faster than their competitors, there are few prospects of large urban logistics centers being built in the capital cities of Central and Eastern Europe. That was one of the primary take-aways from the industrial and logistics panel at CEDEM 2019 entitled “On-line retail’s future depends on the Last Mile”. As two-day delivery was shortened to next-day and more recently same-day services in recent years, many experts predicted that large new distribution hubs would have to be built to accommodate the increasing share of goods that are bought online in major urban conurbations. In reality, however, a wide range of solutions are being found both by retailers and by the logistics companies that serve them.
“What we have seen from the projects we did recently for big logistics companies and couriers, like Schenker in Bucharest or Raaben in Nupaky is that we typically build for them in a reasonable distance from the city center, 10-20 kilometers at the most,” said Remon Vos, CEO of the industrial developer CTP. “The first part of the building is a cross-dock that can be used for delivery vans, which have access to the city and the other part of the building is a traditional warehouse building with 12-meter height that you can access with large trucks. These locations are always strategically linked to the motorway network and close enough to the city to have access with delivery vans.”
“I think it’s an illusion to believe that you can have in the city center a huge logistics hub,” he continued. “I don’t think the community will appreciate that and I don’t think there is any need for it. So you can only get so close to the city and the closer you get the more expensive the land gets.”
“We are not seeing such huge pressure in Warsaw,” said Magdalena Szulc, Business Director – Central Europe for the industrial developer Segro, saying that cities of different sizes lead to different Last Mile solutions. “You can’t compare Warsaw with London or Paris. In Warsaw, we have quite a lot of small business units and parks located within the city but they’re not just related to ecommerce. They do almost everything them, from food preparation to a TV studio and a photography studio. One example is Zara which has a unit within the city from which they deliver within an hour to their shops in central Warsaw. Still, the city of Warsaw has good coomunications so it’s relatively easy to deliver goods from the suburbs.”
Jakub Holec, Managing Director of 108 Agency, noted that ecommerce growing so quickly that it’s problematic even for successful companies to plan for their logistics requirements very far into the future. “We were working with Parfums.cz [now Notino] from the very beginning, securing land for them so they could build their own distribution center. The process went very smoothly and took just 12 months, but within that time they realized that the distribution center was too small for them. So they went back on the market looking for rental conditions asking for rental conditions because they needed flexibility.”
