Real Asset Insight #6 June 2020

Insight & Strategy – E-commerce & logistics
Crisis shines a spotlight on
supply chain management
Onshoring has become a big trend during the pandemic, but
the globalised nature of the sector is expected to continue
‘We’ll see a small
amount of
onshoring, but
globalisation will
continue to
prevail in the
market.’
Ben Segelman,
DHL Supply Chain
Onshoring is just one of many changes to
supply chains that have been accelerated
by Covid-19.
‘E-commerce is one big driver of logistics and
the other is onshoring,’ says Logan Smith, head
of European logistics at Hines. ‘They are two
huge trends that were already on the way before
Covid-19, but that have been accelerated by the
epidemic, catching a lot of people by surprise.’
The health crisis has shone a spotlight on how
supply chains function, highlighting the risks
of their interlinked and global nature. The
pandemic is accelerating the regionalisation and
localisation of supply chains, to minimise the
risks of delays and disruption.
‘Covid-19 has acted like a contrast agent
by showing how supply chains work and
highlighting all the problems,’ says Raimund
Paetzmann, vice president corporate real estate
at online retailer Zalando.
Risk reduction and efficiency have become
more valued than cost savings. The question is
whether this is a temporary reaction or whether
it will lead to permanent change.
A snap poll conducted by Real Asset Media
among market experts showed that 64% of
respondents believe that there will only be a
small increase in onshoring in terms of supply
chains post Covid-19, while 31% think there will
be a significant increase. Only 5% believe there
will be no increase at all.
‘I agree with the poll,’ says Ben Segelman,
head of capital markets UK&I and MLEMEA, at
DHL Supply Chain. ‘We’ll see a small amount
of onshoring, but globalisation will continue
to prevail in the market. There will be lots of
exciting new ways of getting things to the
consumer and the distribution centre will remain
the backbone of an e-commerce facility.’
MASTERING E-COMMERCE
The growth of e-commerce has made the supply
chain more critical than ever, he adds: ‘It’s
become a crucial component of the customer
experience. Mastering it has become a necessity
as well as a challenge.’
The need to be closer to consumers, who
are expecting shorter and shorter delivery
times, is leading to more demand for last-mile
locations and creative solutions, including multistorey
distribution centres and car parks and
repurposing of retail centres.
‘There will be more last mile and at least part of
that will be multi-storey,’ says Smith. ‘Inevitably,
city planners and councils will have to take a
closer look at the design and at the social and
environmental impact and we as a sector are not
used to this kind of scrutiny.’
As well as competition for space and available
locations, what makes last mile challenging are
high prices, traffic and environmental issues,
local restrictions, zoning regulations and permits.
Logistics has undergone changes as the crisis has increased e-commerce
‘Scarcity of land will cause multi-storey to grow
in Europe, it’s inevitable,’ says Paetzmann. ‘We
need a transfer between urban developers
who don’t understand logistics and logistics
developers who don’t understand urban
planning issues.’
Adobe Stock/jdarius
24 Real Asset Insight | Issue 2 July 2020