Stockland explores what changes have occurred in the logistics industry throughout the COVID-19 pandemic and how revolutionary technology such as warehouse automation and data analytics – to name a few – are shaping the ever-increasing area of e-commerce, from Craig Lenarduzzi, Stockland's National Development Manager for Logistics.
There’s been an increase in warehouse automation1, more importance placed on data and analytics, artificial intelligence and hub-and-spoke supply chain models.
Smart warehouse technologies have seen rapid uptake in recent years and play a key role in helping ecommerce platforms improve efficiency, augment order handling capacity and address manual labour shortages.
Stockland’s logistics portfolio provides modern facilities already designed to accommodate potential future changes for our customers.
Robert Salerno, Regional Asset Manager, NSW Logistics and Head of Property Management says, “Our warehouse designs for automation have a greater level of power and greater tolerances in point-loads on slabs. We have also increased heights for some of our new developments, taking them to 14.5 metres to fit an extra pallet so that customers wanting more automated solutions will be able to fit them into one of our warehouses.”
CBRE has examined how automated trucking technology will impact commercial property and concluded it will profoundly shape the logistics sector in Australia.
With the adoption of electric and driverless trucks, the trucking industry will be able to cut both its fuel and labour costs, shifting its focus toward building technological systems that can meet the demand for goods more efficiently while focusing more on inventory and occupancy costs.
As future vehicles become increasingly autonomous, we will see direct effects on logistics facilities, from electric and self-driving trucks.
In Asia Pacific, several governments, in partnership with private companies and universities, are road testing self- driving technology, with Australia, Singapore, Japan and China leading the region. In late 2015, Volvo partnered with industry bodies to road-test autonomous vehicles in South Australia.
The rise of self-driving trucks will lead to growth in IT infrastructure and data centres, as there will be a need for real-time traffic data and for providers to be located near their end users2.
Although full implementation of driverless trucks remains far ahead in the future, advances in the technology behind it have come quite rapidly. The adoption of this technology may also come faster than anticipated, like smartphones and other transformative products that have been accepted quickly throughout the world. It is estimated that 51 percent of the US trucking industry is expecting driverless trucks by 20253.
Technology transforming logistics design
Technology is set to transform modern, space-efficient, high-specification logistics design and operations over the next five years4. This will improve efficiency, provide greater operational flexibility and increase the speed of supply chains.
As technology progresses and costs fall, robots5 will be increasingly used in a wide range of warehouse roles such as unloading inbound goods, putting goods into storage, picking, packing and dispatch. In many of these roles they will work alongside people and hence human robotic interaction will become an increasingly important factor behind warehouse productivity.
Industrial and logistics assets serving next-generation supply chains will also incorporate environmentally friendly, socially responsible features and provide high-quality working conditions.
Stockland National Development Manager, Commercial Property, Craig Lenarduzzi, said "Our business is working on several such developments in Melbourne, Sydney and Brisbane. We are bolstering the logistics property portfolio and development pipeline in response to increasing demand. We’re coming off a three-year period of record demand and there's no sign of it slowing down.”
Craig agreed that a lot of growth in the sector is being driven by the rise of ecommerce saying "It’s likely to be one of the most prevalent drivers, particularly over the last couple of years. If you have a look at online reach, or penetration, from ecommerce in Australia – depending which statistic you go by – it's sitting at a round about 13 or 14 percent at the moment, coming off a base of about 10 percent, and it's forecast to grow to about 20 percent by 2025.
We're continuing to see record levels and we expect to see that increase in the future”.
Does he see Stockland’s logistics portfolio transforming with an increase in the likes of automation? “We are certainly starting to see automation become more prevalent.
“One of the challenges about having a great deal of automation is a relatively high up-front cost which influences customers to take relatively long leases. Other customers want shorter leases because they want flexibility to deal with their supply chain. So, you've got those two kind-of conflicting aspects.
“Larger users such as Woolworths and Amazon, who are developing in Western Sydney, are certainly using a great deal of automation. Less so in smaller warehouses, but it's something that's we're seeing as a growing trend".
Surprisingly, Craig says that the amount of floor space that customers require for their commerce operations is actually far greater than traditional bricks and mortar, “They know with the whole ‘just in case’ phenomena, that they potentially need to hold more inventory. Then there’s reverse logistics, which is obviously when something bought online is returned. They need to make sure that they've got the adequate amount of space to account for returned stock, so their required footprint is actually quite a lot larger.”
Asset agility & portfolio diversity is key
“The more options we have, the more we are able to work with our customers to optimise their footprint. We've certainly been able to do that and with our large development pipeline coming up, we can certainly talk to customers about what those opportunities might look like" says Craig.
*1 UBS Automation and Robotics report
*2 Automated Trucking – a CBRE Research Perspective, 2017
*3 Automated Trucking – a CBRE Research Perspective, 2017
*4 Australia’s E-Commerce Trend and Trajectory report – CBRE 2021
*5 Labour & Automation and the rise of robots in logistics – JLL EMEA Industrial and Logistics, 2018