What is the future of logistics real estate in the Netherlands? During the Top Sector Logistics' Innovation Conference, several researchers tried to steer the discussion on this in the right direction using scientifically substantiated facts and figures. A lively discussion then unfolded with the audience. "Every enthusiastic municipality says yes to a new warehouse. As a result, everyone suffers. We need to get rid of this patchwork of logistics real estate."
According to public opinion, big grey boxes add little to the economy, mar the landscape, create traffic congestion and are a draw for foreign workers who cause social problems. That reality is more nuanced is evident from the experiences shared with the audience by Christian Heerings of Hines Fresh Park Venlo. From his time at the municipality of Venlo comes the story of Red Bull, which initially had its energy drinks delivered from Austria in trays of 12 cans. "However, the Dutch consumer did not want trays of 12 but of 6 cans. A logistics service provider from Oss therefore repackaged the cans. Complete nonsense, was our first reaction. But the work was carried out by people with a distance to the labour market. So is that a worthless or a valuable activity?"
Another example is about the social employment service in Venlo, which has been brought in to sort clothes hangers from Decathlon shops by size and colour. "This is one of the activities carried out in such a big grey box, but again by people with a distance to the labour market. Their work prevents the coat hangers from ending up in the bin. Again, the question is: is this pointless or meaningful work?" said Heerings. "The question is what the logistics sector itself can do to improve the often flawed portrayal in the public media."
In the region
That the right facts are not always used for that image-forming, Tilburg University research shows. The existing perception that most warehouses are full of consumer products, the vast majority of which go to other countries in Europe, turns out not to be entirely accurate. Just over 40 per cent of the stock is destined for the Netherlands. If Benelux and Germany are included, it turns out that as much as two-thirds of the stock stays in the region. "The rest goes to other countries in Europe or beyond," argues Frans Cruijssen, professor at Tilburg University.
The figures come from research on warehouse inventory and its destination, which Cruijssen conducted with colleagues Jan Fransoo and Angela Acocella. It also shows that the vast majority of the stock is not destined for consumers, but for other companies in the Netherlands. "So that's stuff that keeps the economy of the Netherlands going. Many companies in the vicinity of those distribution centres depend on it," Cruijssen says, adding a small caveat. The figures are from 81 warehouses, which make up only 11 per cent of the total number of warehouses with more than 10,000 square metres and therefore do not give a fully representative picture.
Quadrupled
So the added value of warehouses to the Dutch economy is greater than many people think. Yet our country has a disproportionate number of warehouses, figures from Merten Nefs of Erasmus University show. "Per capita, we have two to three times more logistics real estate in the Netherlands than in Germany and France. And that in a small and densely populated country. Because the responsibility over spatial planning has been devolved to lower authorities, all that logistics real estate is scattered across the country. This has created more resistance to its negative effects."
Figures also show that the amount of logistics real estate has quadrupled since the 1980s. Population and wealth growth are often cited as explanations. "These have indeed increased, but not so much that they are a sufficient explanation," Nefs knows. "The main explanation is the eightfold increase in the volume of trade since the 1980s. Of course, some of that remains temporarily in Dutch warehouses before anything is done with it."
Logistics clusters
How to move forward? Tilburg University lists three policy measures that could help reduce resistance to new warehouses. The first measure concerns concentrating new logistics real estate in logistics clusters. "This is anything but a new idea, but not one that is being put into practice. Every eager municipality that still has a plot lying around and is offered a nice plan says yes to logistics real estate. As a result, everyone suffers. We need to get rid of this patchwork and create some super-efficient logistics clusters. Through economies of scale and facility sharing, less space is ultimately needed," Cruijssen explains.
Another measure is about more efficient use of cubic metres in all those warehouses. "Then, once we have those warehouses, the key is to extract as much value as possible from them. That means, among other things, more automation and higher storage density," Cruijssen argues. "Finally, we can go even higher. If the price per square metre is high enough, it will automatically become more attractive. This is already happening in Tokyo, Singapore and other metropolises."
Multiple land use
Nefs suggests another possibility: multiple land use. By combining several functions on one plot, we need less space overall. As an example, Nefs mentions the Spaanse Kubus in Rotterdam, a former distribution centre that now serves as a data centre and business centre. In addition, Nefs sees another challenge: facilitating the circular economy. "We already see more and more circular activities such as repair or refurbishin taking place in logistics real estate. My suggestion is to use logistics real estate more for that."
After Nefs' and Cruijssen's presentations, an interesting discussion takes place between academics and advocates in the audience. One points to the companies specialising in plastic recycling, several of which have gone bankrupt. "Circular economy sounds nice, but if the government doesn't promote it, all that work won't pay off," exclaims one. "I wouldn't want to invest in logistics real estate for the circular economy now."
National direction
Another wonders whether we should set up a ministry for spatial planning again as in the past. "Shouldn't we move towards a national direction for logistics real estate?" From the back of the room, a listener shouts that we should take an example from the agricultural sector. "That is where everyone is lagging behind because they are now in parliament. That sector has already finished its vision and submitted it to the SER. The logistics sector does not. That one just looks at the government and waits. We have thought for too long that it would all work itself out."
