Tell us about the ‘three Ds’ acting as a catalyst for this shift
The three Ds – digitalisation, decarbonisation and deglobalisation – are three megatrends which we view as essential to building agile supply chains capable of navigating an increasingly unstable global supply landscape.
Digitalisation leverages technology to enhance efficiency throughout the supply chain. Decarbonisation considers and prepares for the growing emphasis on environmental policies from both consumer and regulatory standpoints. Deglobalisation promotes a local approach that removes over-reliance on a single source.
These three strategies help businesses develop supply strategies that are sustainable and robust in the face of long and short-term disruptions.
How crucial is it for firms to invest in the digital transformation of their supply chains?
Logistics has been adopting tech for many years, but there are now more opportunities than ever with advancements in robotics, drones and autonomous vehicles. These are changing the game and driving efficiencies.
Data-driven decision-making should be a key investment focus for businesses, especially as AI and machine learning have become much more readily available.
While data to inform businesses, such as weather patterns, port congestion and manufacturing delays, may have been accessible for some time, with AI, information can be taken in, processed and translated into actionable insights and strategic advantages much faster.
To what extent are you seeing companies prioritising emission reduction in their supply chains?
Very soon organisations operating within the EU will be required to report Scope 3 emissions under the EU Corporate Sustainability Reporting Directive (CSRD). This has pushed decarbonisation further up the business agenda, as they’ll need to report on indirect emissions such as how their goods are transported and the leased facilities that they are stored in.
The use of electric vehicles, biofuels and solar panels are all being used by organisations to reduce emissions. However, they are really a drop in the ocean and there needs to be a more holistic approach to decarbonising infrastructure.
We believe the rise of logistics parks will be a game-changer – where warehouses don’t operate in silos, but resources such as energy systems are shared between neighbouring tenants to benefit from economies of scale. Logistics parks are also strategically located close to end users to reduce transportation and offer better Scope 1 and 2 credentials.
How are firms deglobalising their supply chains?
Moving away from a single global source through regionalised sourcing and nearshoring is central to building robust supply chains. A prime example of this is battery manufacturing where companies are no longer using mega-factories in Asia, but instead spreading their production out across several European markets to make the supply chain more resilient.
However, the growing popularity of this strategy is leading to fierce competition on the continent for warehousing and, therefore, migrating to this model requires high levels of pre-planning to ensure infrastructure is available. We work with tenants to help them consider the space they may need in the future, as well as for now.
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