Supply chain disruption to hit warehouse location choice


CBRE sees technological developments driving property needs in Australia as elsewhere

Supply chain disruption to hit warehouse location choice
David Egan predicts massive supply chain change

 

Transformative and disruptive technologies – including autonomous trucks, 3D printing and warehouse automation – will dictate facility location, size and use, according to international property firm CBRE.

This will be due to shippers, retailers and manufacturers needing to configure their supply chains and distribution strategies in the face of innovations expected to be in widespread use by 2025.

And as a developed market, Australia will be involved in the shift.

"Autonomous vehicles, 3D printing and warehouse automation stand to reshape supply chains on an unprecedented scale, but real estate won’t be innovated out of that equation," CBRE head of industrial and logistics research in the Americas David Egan says of the global trend.

"While use of autonomous vehicles in shipping likely will allow for a greater emphasis on a few massive distribution centres in far-flung, less expensive locations, 3D printing meanwhile will result in many users needing more industrial space closer to customers to facilitate on-demand, custom manufacturing."

The CBRE report examines the three areas of technological advancement and their likely impact on the industrial and logistics markets:

  • Autonomous trucking – labour represents roughly 75 per cent of the cost of shipping a full truckload across the US, and drivers are limited to 70 hours of driving a week, equating to 3,000 miles (4,500km). The advent of autonomous vehicles will allow cargo to travel greater distances in less time, saving costs. This, in turn, will allow some users to operate more extensively from large distribution centers in outlying locations, where land is less expensive
  • 3D printing – the ability to manufacture certain items on-demand will spur a horizontal shift in the supply chain. Whereas this advancement may lessen the need for centralized distribution space in some cases, it also increases the requirement for bulk, raw materials to be stored at printing sites close to the consumer in last-mile distribution facilities
  • Automation in industrial facilities – a greater use of robots and other automated technology stands to reduce labor costs and increase efficiency. However, it also will stoke demand for modernised industrial buildings equipped to accommodate the design requirements and IT infrastructure of automation.

"Industrial real estate is poised for significant change, with the rapid rise of automated technologies and 3D printing set to significantly disrupt the global supply chain," Matt Haddon, CBRE’s regional director of industrial and logistics in the Pacific, says.

"Those that will be best positioned for this disruption in the supply chain will start making the necessary investments today.

"The technology is here, and is implemented in hubs around the world, with developed markets in the US, Europe and Asia Pacific leading the way."

The full report can be found here.

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