Covid-19 and its lockdowns have had a significant impact on the demand for last-mile delivery. Over the past year, we’ve experienced a surge as consumers have been forced to shop online, often for the first time.
This year is set to be another booming one for the sector. It’s like an avalanche accelerating at pace. As more high street retailers such as Debenhams and Arcadia Group close their doors and move to online-only, there’s no turning back.
The growth of last-mile delivery has put pressure on the availability of warehousing and distribution sites. Given the limited development pipeline, it indicates demand will continue to outweigh supply and therefore we expect to see continuing upward pressure on rents.
Intensification of land use
There will be a finite number of new warehouses that can be built, meaning that intensification of land uses will be key. It is also important to make the most of alternative logistics spaces. For example, could under-utilised offices, multi-storey car parks and retail units be repurposed for storage or consumer collection/drop-off points?
To adapt to the growing demand for e-commerce the focus must be to continue to fulfil orders in a sustainable and cost-efficient way. Change is inevitable and two big considerations for 2021 will be how to ease potential increased traffic congestion and the reduction of CO2 emissions.
Collaboration between retailers could be a solution to tackle congestion, while within the urban fringe, could e-scooters or walking/cycling couriers be a more sustainable option?
Developers, occupiers and investors are all acutely conscious of the importance of energy efficiency within warehousing, thus providing buildings that excel in environmental performance. Ducting points for electric vehicles, photovoltaic panels, recycled materials and air-source heating and cooling are just some of the new ‘must haves’ that will ultimately have an impact in reducing the built environment’s carbon footprint.
Last-mile delivery is entirely driven by consumer demand and until we’re on the other side of the pandemic, we won’t know exactly what that demand will be.
What we can safely predict is that last-mile logistics will continue to grow regardless thanks to our increasingly digital world, growing population, technological advancements and a change in mindsets. So with Covid currently accelerating change, it should be a good year but not one without its challenges.
Ruth Leighton is a director at Avison Young
Is the future for industrial and logistics still bright?
- Currently reading
Last-mile hits the accelerator