Big, bigger, biggest. It looks like a rat race but economies of scale urge shippers and logistics service providers to establish mega distribution centers (more than 400,000 sq feet or 40,000 sqm).
These mega distribution centers are realized by retailers/on line shops (e.g. Amazon, Primark, Lidl, Action), producers/brand owners (like Tesla, Michael Kors) and logistics services providers (for example Rhenus Logistics, DB Schenker, Arvato). “An important driver are economies of scale; in order to use the latest warehouse technology, to deploy personnel efficiently and to combine deliveries. Traditional retail chains, confronted with increasing online sales as well as plane e-tailers need more warehousing space to have enough inventory of a wide variety of products and to pack all deliveries for individual customers. And let’s not forget the space needed to unpack and inspect all returns and make them ready for a new delivery” told René Buck, CEO of Buck Consultants International, the audience at a recent Property EU Forum.
The trend towards mega distribution centers can be witnessed all over Europe, for example in the United Kingdom and Germany. But also a logistics hotspot like the Netherlands sees a growing number a mega distribution centers. Maurice Kuipers, senior consultant at Buck Consultants International, presented recently the results of an analysis of mega distribution centers in the Netherlands. Exactly 28 mega distribution centers are established or announced since 2013, covering 2 million square meters warehouse space (20 million square feet) and employing more than 10,000 people. “Particularly the Southern part of the Netherlands, on the corridors between Rotterdam and Germany and Rotterdam and Belgium/France, tops the ranking. Especially the regions in the province of North-Brabant do very well, due to their geographical location towards the European market, excellent multimodal accessibility and developed ecosystem such as the right labor force and available sites”, says Maurice Kuipers (see map).