Recycled facilities

Repurposing and reusing existing infrastructure

Much of the logistics facilities developed within cities provide new use for old spaces. In fact, the growing demand for urban logistics spaces has opened a new frontier in terms of investment and redevelopment opportunities for previously vacant or under-utilised properties.

Examples of such repurposed and reused facilities include empty big box retail lots and vacant department stores, grocery stores or retail spaces; old government facilities, abandoned industrial sites in various stages of remediation and underused office space (Franklin Templeton, 2019; Savills, 2019).

The Amazon Prime hub in Berlin is located in a former consumer electronics store in a prime location on the main shopping street Kurfürstendamm (Bulwiengesa, 2017). In Germany as well, UPS rents an old kiosk in the city centre of Herne, so supply the entire city with cargobikes (Bulwiengesa, 2017).

In Spain, Amazon leases the headquarters of publishing house Editorial Gustavo Gili in the centre of Barcelona. The building stores 20,000 of Amazon’s most commonly ordered products in its large basement and employs more than one-hundred people to carry out deliveries across Barcelona within two hours (Savills, 2019). Analysts have speculated that Amazon would convert vacant department stores in the United States into distribution centres, although this has not been confirmed (Soper, 2020).

An alternative to building up is building down or, more likely, utilising existing underground space such as urban car parks (JLL, 2017). In central Paris, Chronopost operates two underground facilities: a former city-administered parking garage below the Place de la Concorde and below an existing building in Beaugrenelle along the quay on the Seine (Bulwiengesa, 2017).

A thorough redesign of these existing infrastructure is however necessary. In establishing new formats in existing structures and essentially putting the existing building fabric to use, it is important to apply new thought patterns (Bulwiengesa, 2017). For micro logistics, independent adviser Raimund Paetzmann says that the docks and corresponding fit-out features that usually come with, for example, converted office or retail premises are entirely sufficient. Besides that, public transportation links are helpful as well (Bulwiengesa, 2017). Rainer Kiehl from UPS Germany summarises the basic requirements for micro logistics as follows: a small storage, a loading dock, a goods lift or similar that can be retrofitted and the possibility to unload a 7.5 ton truck (Bulwiengesa, 2017).

One important obstacle in repurposing and reusing existing infrastructure for urban logistics relates to the zones in which this infrastructure has been constructed. These zones are usually not classified for industrial use, including logistics (Savills, 2019). Variances can be obtained but before issuing, cities are likely to consider the community’s reservations on the impacts in terms of traffic, pollution and noise that logistics facilities generate. However, urban logistics research has established the societal and environmental benefits associated with reintroducing logistics in the areas of consumption and production. Evidently, stakeholder management remains a key issue to tackle.

Sharing space

Spatial scarcity is also overcome by sharing space between logistics activities and other functions. Related to e-commerce, space for logistics is shared in buildings ranging from small to large.

With the merger of online and physical retail channels (i.e. “omnichannel retail”) and the introduction of delivery locations alternative to homes, stores of all kinds of increasingly dividing their infrastructure functions between sales and logistics. Many local proximity stores are serving as collection point for logistics service providers and large retail brands. Next to selling newspapers, tobacco and flowers, for example, they are allocating ever more space to stock delivered and returned parcels (Paazl, 2018). Larger stores, specifically those that are part of retail chains in fashion, electronics and other matured online product categories, experienced this transition too. Different logistics functions have been introduced in such stores, including the collection and return of online orders and the preparation and shipment of online orders to other stores or directly to consumers’ homes (Buldeo Rai, Verlinde, et al., 2019). 70% of the population in the United States lives within eight kilometres of a Walmart store. The company therefore uses its stores as e-commerce hub, by encouraging consumers to collect their online orders at their neighbourhood store (Franklin Templeton, 2019). In doing so, Walmart frees their customers from shipping charges and is able to organise their deliveries more efficiently.

An advanced logistics system was introduced at a building complex in Tokyo Midtown in 2007. This building combines commercial and recreational activities as well as offices and generates a huge demand for goods (Taniguchi & Qureshi, 2014). Accordingly, its developers were interested in improving the traffic environment around the buildings as well as providing better collection and delivery services to tenants. As such, with the help of an experienced logistics company called “Sagawa”, a goods distribution system was planned and designed from the beginning of the projects (Taniguchi & Qureshi, 2014). They incorporated a consolidation centre at basement level, 26 dedicated goods elevators, 54 parking spaces for loading and unloading trucks and an information system for support (Taniguchi, 2014). The goods distribution system at Tokyo Midtown adds 50 to 100 JPY to each delivered parcel, which translates in about €0,41 to €0,82 per parcel. It also generated improved customer service, reductions in congestion and CO2 emissions and increased efficiency of the loading and unloading zones (Taniguchi & Qureshi, 2014). In Singapore, the Supply Chain City property is part of a mixed use function. It houses operator YCH's head office with 140,000 square meters of warehouses and 50,000 square meters of office space over five floors (Boïco, 2016).

Mobile solutions

In the quest for appropriate urban infrastructure for logistics activities, mobile solutions provide a means to bridge the time searching for a more permanent and certain infrastructure and to test out different locations.

They also offer flexible reconfiguration options in terms of size, structure and capabilities and are therefore gaining in significance in urban logistics (Bulwiengesa, 2017). In Germany, UPS tested its now called “Hamburg model” in which four sea cargo containers were placed in the city to deliver parcels to consumers. A similar set-up was proposed in Oldenburg, were UPS placed a trailer in a parking lot on the city’s periphery to cover the city centre with cargo bicycles (Bulwiengesa, 2017). Such pop-up storage units are also called “flex hubs” and provide logistics service providers with interim solutions (Bulwiengesa, 2017).

Unconventional solutions

Some solutions for urban logistics can be considered unconventional.

Examples to cite are the pitched tents on vacant lots in three metropolitan areas that Amazon used during the holiday rush in the United States in 2018, to carry out all deliveries in time (Franklin Templeton, 2019) or the “airborne fulfilment centres” that Amazon patented which enable drones to carry out deliveries (JLL, 2017). Such inventions represent a complete departure from warehouses as we know them now, being fixed in a location to a point on the ground, but it is not something we see happening any time soon (JLL, 2017).