By Colliers International
The growth of e-commerce, technology change, and other cyclical and structural factors, such as the crisis of the shipping industry, are reshaping supply chains and have major implications for industrial property portfolios/markets according to a new research from Colliers International. The report also found the three key movers and shakers.
1. The e-tailers taking on logistics. Global e-commerce players, such as Amazon and Alibaba, are increasingly involved in the logistics side of their business and invested extensively in logistics to drive their business. Amazon offers its marketplace sellers outsourced logistics and shipping and is seeking greater control of its delivery network to reduce cost/improve speed of deliveries. In the future it could start offering logistics services to third parties, potentially taking business from its logistics partners. Amazon accounts for an estimated 5% and 4% of UPS and DHL’s revenues, respectively. “Unlike Amazon, Alibaba does not invest in logistics and warehousing directly and relies mostly on logistics partners to deliver goods. Although Alibaba does not pose a direct threat to delivery companies such as UPS, its use of technology is impacting on part of the supply chain,” says Bruno Berretta, associate director, EMEA Research – Industrial & Logistics, of Colliers International. “Alibaba’s “One Touch” on-line platform offers small/medium merchants a series of export-related services including customs clearance and logistics, and now shipping, bypassing third parties previously involved in this process.”
2. New strategies of container shipping companies. Due to the delivery of the latest generation mega-container ships and weaker global trade, container shipping companies have responded by forming alliances with competitors (mergers and acquisitions) and invest in technology and automation, an area where container shipping companies have lagged other industries. Some carriers are looking to diversify away from sole sea-shipping. Maersk, the world’s largest container ship fleet operator, for example is looking at logistics and inland transportation.This could cause some reshuffling within industrial portfolios but also drive new investment in installations and logistics space.
3. Challenges for freight forwarders. This market segment is under severe competitive pressure for two main reasons: The impact of technology, making middleman redundant and the challenges posed by e-commerce companies and logistics start-ups. Freight forwarders respond to them by digitalizing processes (such as freight booking and monitoring) to make them more efficient and transparent. Other services include road transport, parcel/postal courier services, and contract logistics. Parcel delivery business directly benefits from e-commerce so logistics companies are putting more resources to this business segment.