How logistics is facing future disruptions

The rise of the automated dark store

As the shopping season ramps up, what does everybody want this year? Ultra-fast online deliveries, of course.

Consumer expectations for on-demand shopping are on the rise. And to fulfil those demands quickly, so are dark stores. These micro-warehouses filled with goods for online shoppers are developing fast in established markets like the U.S and Europe, and also spreading to new markets in Asia Pacific.

 “We’re about to see the largest disruption to retail and the supply chain that we have ever witnessed,” says Brittain Ladd, global strategy and supply chain consultant, referring to the high levels of automation feeding a consumer culture. “What we’re about to see through the rest of the 2020s is more changes in retail and business than we have seen in the prior 100 years.”

 The changes come amid a sustained boom in the logistics real estate sector. According to JLL’s Future of Global Logistics report, 74 percent of surveyed professionals expect demand to continue grow at pace over the next five years.

What do the latest developments with dark stores mean for the world of logistics and supply chains?

Listen to Ladd and Michael Ignatiadis, head of supply chain and logistics solutions for Asia Pacific at JLL, discuss how automation is reshaping dark stores, the companies already doing it well, and what it means for the future of industrial and retail real estate.

How automation is reshaping the logistics job market

Automation isn’t just reshaping how goods travel from factories to front doors.

It’s also reshaping the logistics sector’s workforce. This is true of people on the warehouse floor working shoulder-to-shoulder with robots, but it goes all the way up to the c-suite, with increasingly needs for skills like data analytics and risks management.

While skills needed are a reflection of an increasingly tech-driven sector, at the end of the day one of the most important skills is very human: relationships.

“I think the biggest difference between the companies that will win, and those that will lose, will be people,” says Radu Palamariu, Global Head of Supply Chain & Logistics Practice at Alcott Global. “The same types of technologies will be available to everybody… but the ability of teams to act fast will make the difference.”

Listen to Palamariu and Michael Ignatiadis, head of supply chain and logistics solutions for Asia Pacific at JLL, discuss what skills have made, and broken, logistics businesses in these times of extreme disruption.

How logistics is facing future disruptions

From the blockage of the Suez Canal to the pandemic, there have been plenty of reminders about the fragility of global commerce in the last year.

The events have been a wake-up call for manufacturers and logistics firms, which are trying to figure out how to address unpredictable disruptions to intertwined global supply chains.

“Right now resilience is emerging as a lot more important than cost,” says John Gattorna, a leading supply chain thought leader and author. “Although if you get it right, increased resilience shouldn’t necessarily cost more.”

The questions have also become increasingly important in commercial real estate, where the logistics-sector boom appears set to continue.

What does it take to be ready for periods of disruption, and what happens if you aren’t?

Listen to John and Michael Ignatiadis, head of supply chain and logistics solutions at JLL, discuss what companies are doing to prepare for disruption, what’s holding them back, how global firms are thinking local, and the shape of a modern logistics footprint.

The true cost of fast deliveries

The rising demand for fast, efficient deliveries over the past year has become tied up in the growing urgency around sustainability.

With growing awareness of the trade-off between fast deliveries and carbon emissions, what are companies, investors, governments and consumers doing about it?

Crucially for real estate, many of the decisions will come down to cost. According to a JLL recent survey of logistics experts, potential cost savings are a major driver behind green efforts, with 73% of respondents rating energy savings as the highest sustainability priority.

Listen to Alexis Bateman, the former Director of MIT’s Sustainable Supply Chains Lab, and Michael Ignatiadis, head of supply chain and logistics solutions at JLL, discuss whether consumers will ever change their behavior, the role green warehouses can play, and the metrics companies need to track their progress.

“Sustainability can't be a trend,” says Bateman, who has changed roles since recording this podcast. “We need to keep that pressure on, finding the right tools to actually achieve those commitments and really continuing this momentum.”

Are China's real estate markets back on their pre coronavirus trajectory?

Asia Pacific investment volumes hit $35 billion between July and September, compared to $26.1 billion in previous three months of 2020, according to JLL.

It was China that took the bulk of the region’s investment, as the country’s economic recovery continues to outpace the rest of the world. In a quarter when most economies contracted, the world’s second-largest economy grew 4.9 percent.

Domestic investors remain the predominant source of capital, but larger cities like Beijing have been drawing foreign investors as well.

In this podcast, our host, Art Patnaude, has a dialogue with JLL’s Julian Zhang, Managing Director, North China, joining us from Beijing, to discuss the implications for Asia Pacific real estate investors.

The topic at hand – the performance of China’s real estate markets

“In the third quarter, 70 percent of the transactions in Beijing involved foreign investors. Almost half of the transactions done in the city so far this year have involved foreign investors, demonstrating the global appeal of this market,” he says. “Geopolitical issues and conflict doesn’t stop investor interest in key cities like Beijing. They're more focused on market fundamentals and the solid demand dynamics in this market will continue to attract more investors from offshore.

The fourth quarter is looking like it should maintain the increased momentum. Zhang observes, “We are starting to see more and more investors show up in Beijing. This is one of the hottest market in the near future for global investors.”