XXL WAREHOUSING: TIME TO THINK BIG
The port ‘business ecosystem’ includes logistics activities, most importantly warehousing. Most ports have developed logistics zones to attract warehouses. This strengthens the port business ecosystem, as warehouses generate captive cargo for the port. In addition, developing warehousing sites allows the port development company to capture some of the value created by investments in port and terminal infrastructure. Ports are often so attractive that logistics companies are willing to pay a ‘premium’ for a location in the port.
In developing sites for warehousing in the port area, one relevant issue is: what size should a site be? Increasingly, the answer seems to be: very, very large. In Northern Europe, the term XXL warehouses has emerged, to denote all warehouses with over 40,000 square meters of ‘warehousing space’. Most new investments were found, in a report from logistics advisory firm BCI, to be in this segment.
Some cases even suggest that a new category ‘XXXL’ is needed, for developments such as: DSV in Moerdijk, which has a 200.000 square metre logistics space on a 20 hectares site. And similarly for Bestseller (a company with brands such as Jack & Jones) that has a 28 hectares in Lelystad or Inditex (with brands such as Zara) that has 35 hectares, also in Lelystad, and DHG which has 30 hectares in the Port of Rotterdam. In Northern Europe, the record may be Katoennatie’s ‘Loghidden City’ a 216 hectares project, under development for two decades, consisting of various warehousing buildings with a combined capacity of more than 1 million square metres.
A key driver for the increasing size of warehouses is the growth of e-commerce, that requires more storage, as well as operations in ‘return logistics’. In addition, warehousing automation drives large warehousing sizes, as automation creates scale economies in warehousing. All of this is relevant for port companies giving consideration to developing or redeveloping logistics sites in port areas. It is very relevant to ‘think big’.
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