Optimizing location and real estate by city can unlock substantial cost reductions for urban parcel delivery operators, claims Cushman & Wakefield's analysis of 33 key European cities.
City planners, delivery operators, and real estate investors will have to take into account that an additional €109 bn will be spent in Europe on products delivered as parcels by 2027, together with traffic in cities and the availability of logistics real estate.
City size, population, and demand paint a unique logistics picture for every urban center. Cushman & Wakefield's analysis maps these complexities, revealing the ideal warehouse network for each city – balancing cost, speed, and customer satisfaction.
City logistics needs vary wildly, with some thriving on a single edge-of-city facility, while others require a network of hubs. Although few cities need multiple depots on the edge and within inner city locations, this is likely to change with the growth of parcel volumes and evolving delivery strategies.
In Budapest, 77% of the population can be reached within 30 minutes drive from a single location on the outskirts of the city, while in Berlin a multiple-facility strategy could achieve coverage of 90% of the city’s population.
Cushman & Wakefield's model reveals a 13% reduction in operating costs for Milan's urban deliveries by simply replacing a single large facility with two smaller ones strategically located closer to demand.
Similarly, serving an inner London catchment area with an edge-of-city facility will result in an additional 9% operating cost saving compared with using a depot in an inner-city location.
Sally Bruer, head of EMEA logistics & industrial and retail research & insight at Cushman & Wakefield, said: “While there may be a trade-off between location and rental rates, inner city locations can still deliver savings overall when accounting for significant reductions in transport expenditure. Looking ahead, ensuring the resilience and effectiveness of city logistics in a rapidly evolving landscape is paramount and will require creative thinking by multiple stakeholders. This means leveraging both existing and new infrastructure types; elevating logistics-specific capacity through intensification of developments on appropriate land; repurposing other assets into microfulfilment space where viable; and fundamentally reassessing how we integrate logistics seamlessly into mixed urban environments.’
