Prologis’ Focus on Urban Logistics

Prologis’ Focus on Urban Logistics

When it comes to the logistics sector, one thing is certain: the sector has been continuously changing for more than a decade. There are many reasons for this such as the rapid changes taking place in the commerce sector, which are not only having a major impact on logistics but are also profoundly transforming our cities.

eCommerce

According to data from the B2C eCommerce Observatory at the Politecnico di Milano School of Management, the value of online purchases in Italy exceeded €27.4 billion in 2018, an increase of 16% over the previous year. The eCommerce market has recorded a record growth rate of €3.8 billion. Online shopping alone is worth €15 billion (+ 25%) and shows an impressive growth trend. However, according to an Observatory study, Italy still lags behind the main European eCommerce markets (France, Germany and the United Kingdom). To further develop the Italian eMarket it is necessary to strengthen the Food & Grocery supply, the first item of expenditure in an Italian's shopping cart. Despite the entry of various local and international players in this sector, it is still not possible to guarantee widespread territorial supply; four Italians out of five cannot yet shop online with an adequate level of service quality. The rapid development of electronic commerce is changing consumer habits and, as the Observatory’s research underlines, changing client expectations of service quality. In that respect, fast shipping plays a fundamental role.

Urban Logistics

Urban logistics presents an important challenge for both the logistics and transportation sectors. New solutions are required in terms of the location of logistics platforms. In larger urban centers, for instance, it has become a priority for hubs to be located closer to customers both to ensure same-day or next-day delivery services, and to manage returns more efficiently. Therefore, rethinking the distribution of logistics buildings, evolving from a highly centralized distribution model in which large buildings serve vast areas, towards a decentralized model, with smaller buildings operating 24/7 near or within the main urban centers, is of the utmost importance. Such buildings need to be built in perfect harmony with the urban context, and equipped with sustainable, temperature-controlled environments to properly manage the Food & Grocery supply.

The Role of Municipal Administrations

Urban logistics pose a new challenge, not only for logistics and transport operators but also for municipal administrations, which need to become aware of the eCommerce sector’s profound transformation and impact on cities. According to Sandro Innocenti, Country Manager, Prologis Italy: "Urban logistics is a cause for concern for local administrations, due to its impact on both traffic and pollution. However, I believe that a paradigm shift is necessary. In fact, it is important to be aware of new consumption models. It is preferable to have well-maintained vehicles, ideally zero-impact ones, such as electric vehicles, delivering goods to many consumers, rather than having a great number of consumers who head for shopping centers with polluting means of transport and often in poor maintenance conditions. If we take into account the increasing penetration of electric vehicles, the energy optimization of logistics buildings as well as their environmental sustainability certification, we can say that the impact of logistics buildings is lower than that of residential ones. I, therefore, think it is important for those who are called to administer our cities, especially the larger ones, to anticipate market trends by adapting urban planning instruments, to set clear rules and bureaucratic procedures, and to establish high environmental standards for buildings. Modern logistics represents a great opportunity for job creation and development ".

Prologis Last Touch® Buildings

As a world leader, Prologis is once again at the forefront of innovation, and is taking on the challenge of developing urban logistics buildings in Italy. Called Last Touch® facilities, these are small logistics platforms of around 5,000 square meters located within or near main urban centers, for the most part in Milan and Rome.

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