Same-day Deliveries Driving E-Commerce Warehousing Solutions

Last Mile Delivery Driving E-commerce Warehousing Solutions in Cape Town

The Cape Town industrial real estate market is seeing an increased demand for warehouse solutions driven by E-commerce, with a focus on same-day delivery. As the customer base for online retail grows steadily in South Africa, real estate requirements are shifting focus from the storefront to logistics. Driven by growing customer service expectations, real estate strategies need to accommodate stricter variables on turnaround time and delivery speed.

Last-mile delivery and city-based warehousing

Supply chains are increasingly becoming more ‘consumer-centric’ and therefore transforming into demand chains. As such, warehouse solutions of retailers are starting to incorporate an ‘interim’ or small ‘consolidation’ centre close to main commercial nodes to accommodate same-day or ‘last-mile’ delivery requirements. The trend is especially evident in Asia, where multi-storey warehouse facilities are common to address this need. In the Cape Town market, a growing number of smaller industrial facilities are being positioned in the Salt River/Woodstock node being central to the CBD and main arterial routes. Montague Gardens is also proving popular.

Jon Sleeman, director of JLL’s EMEA and UK Logistics & Industrial Research team, argues that Last-Mile delivery requirements are forcing industrial real estate to adapt to consumer needs: “It makes sense for one driver to make multiple drops, so delivery drivers could visit consolidation centres – interim warehouse facilities – to either deliver or pick up stock to distribute within a specific area. These centres will need good access but only limited storage”.

Vertical integration of courier services

In a relentless pursuit to offer greater delivery speed and efficiency, E-commerce providers are increasingly seeking to integrate their courier or delivery service with their business model. A key example is South African retailer acquiring 60% of Mr Delivery in 2013 to better integrate its delivery component with its overall service. At the time of the acquisition, press releases made the objectives clear: “We are teaming up to give speedier and more efficient service through the eventual introduction of same-day delivery for any item held in stock.”

A preference for new builds and developments

To accommodate greater efficiency in support of same-day delivery, retailers are investing in new builds or developments. Lloyd Nussey, director of Industrial Leasing at Baker Street Properties, notes that new developments are increasingly finding favour with retailers who need to accommodate stricter delivery requirements for the following reasons:

  • Height. Some new industrial developments are 15m high to the underside of the eves. This enables greater efficiency in terms of racking and shelving solutions. Automated technologies and equipment utilized to store and move products are more in line with the efficiency and speed requirements of E-commerce retailers.
  • Ease of access. Most logistical and E-commerce operations require cross-docking via multiple dock levellers. To accommodate multiple delivery vehicles at any given time, multiple dock levellers enable forklifts to quickly access trucks directly from inside the warehouse.
  • Green Efficiencies. Various green efficiencies associated with new developments offer E-commerce providers long-term savings and addresses customer expectations on sustainable operations. Efficiencies include light sensors, greywater systems, centralized refuse for recycling, automated closures and openings as well as solar panels.

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