Two-Story Warehouses And Car Bans: How Logistics Will Change Our Cities

Europe is facing growing demand for logistics services but a diminishing supply of logistics land.

JLL associate director of EMEA logistics and industrial research Alexandra Tornow talked to Bisnow about six ways European cities are responding to the challenges of "logistics sprawl," and the implications and opportunities for real estate.

A Trio Of Ways To Curb Traffic

Cities are growing, traffic is growing, climate change and emissions are big problems, and logistics needs to support initiatives to improve those aspects of city living.

“Logistics need to be more efficient,” Tornow said.  

One possible solution is to ban cars. If it sounds radical, it should not. Madrid, Finland, Sweden and the Netherlands have all done it to some degree, and even London has made steps to get cars off the road. Tornow said that in the future there will be hardly any European city without some road restrictions.   

But failing that, transhipment points where freight can be transferred from diesel vehicles to electric vehicles could go a long way in making urban life more manageable and making logistics more smooth. These facilities could range from shared transfer points on roadsides to more developed facilities with buildings for consolidation. Bordeaux, for example, has implemented espace de livraison de proximité (ELP) initiatives that allow for transshipment of freight to more environmentally friendly vehicles. ELPs along roads are dedicated to the loading and unloading of goods for delivery to nearby destinations and are typically very small scale operations, often only employing one or two people.

Another solution that is being considered in the UK is the use of underground freight pipelines. Cambridge-based engineering company Mole Solutions has been awarded a feasibility study grant from the government to consider their potential. The company has developed a system that it claims could reduce road freight in urban areas by using freight pipelines that link edge-of-town consolidation centres with inner town nodal points. Mole Solutions is looking at piloting in Northampton, where there is a disused underground rail line between one of the town’s main logistics estates and the town centre. The technology employs driverless, electric-powered capsules running along dedicated underground lines under automatic control and has the potential to run 24 hours a day. This concept links with two other approaches to reduce city congestion, namely edge-of-city consolidation centres and inner city last-mile lower impact deliveries such as electric vehicles or bikes.

Go Up: Multi-Storey Warehouses

In many cities, office, retail and residential developments have become more extensive over time, whereas logistics space has shrunk. Due to increasing demand for land and rising land values in some of Europe’s major cities, there is emerging interest in certain cities in multi-storey (and multi-user) ramped warehouses. In London, there is one two-storey warehouse, completed at Heathrow in 2008. Tornow cites a 1970s era Paris development as well that is almost fully let. Though there are not many in Europe, it is commonplace to see eight- or nine-storey warehouses in Asian cities like Hong Kong and Singapore.

Get Down

Underground space is likely to free up in the years ahead as driverless cars and shared driving takes hold and becomes the norm. One potential gold mine: underground car parks. They could be transformed into logistics hubs in the heart of the city. It is already being done in Paris, where Chronopost operates two underground facilities. The first opened in 2005 in a former city-administered parking garage below the Place de la Concorde. The second, which opened in 2013, is in Beaugrenelle below an existing building. These facilities enable Chronopost to reduce mileage and emissions for last-mile deliveries in Paris.

Nighttime Deliveries 

Many European cities are investigating deliveries at night, when there is generally spare capacity on roads, Tornow said. There are currently restrictions on transport and warehouse operations, usually due to the noise. But the noise can be mitigated by using quieter vehicles, like electric vehicles.

Warehousing As A Service

The growth in last-mile fulfillment and ever-quicker delivery has put enormous strain on logistics, Tornow said. The delivery window for most retailers used to be five days, then it sped up to next day and now an order is sometimes promised within an hour. As the snappy pace of e-commerce grows, last-mile facilities will need to be suitable for automated delivery by robots. In addition, click-and-collect hubs, including lockers and pickup points, should be in a range of urban locations, including railway and Tube stations.