India urban logistics

Urban logistics spaces in India are expected to exceed 7 million sq. ft by 2022, as demand surges, according to JLL report 'India Urban Logistics - Are dark stores revolutionizing the sector?' The urban logistics industry in India is at a very nascent and on the cusp of going mainstream. Demand will be supported by freight congestion that is impacting cities and communities and the need to mitigate the associated environmental impact of vehicles on these locations.

According to JLL, urban logistics will help address infrastructure, community, and environmental concerns via the efficient movement and transport of goods in urban areas through last-mile storage spaces. Furthermore, urban logistics is expected to expand significantly beyond 2022, as the increasing trend of faster goods distribution and e-commerce penetration increases nationwide.

India urban logistics
“Urban logistics will play a more front-and-centre role in the metropolitan economies of India as consumers become more tethered to the convenience, transparency and hygiene benefits of online purchasing. The surge in e-commerce has led to increased storage space and logistic delivery capabilities, thereby giving owners and developers a clear opportunity to capitalise on the demand, which we believe will easily exceed 7 million sq. ft by 2022,” said Radha Dhir, CEO and Country Head, India, JLL.

“Today, last-mile delivery takes up more than 47% of e-commerce transportation costs. Urban logistics have come in as the perfect bridge to reduce these costs as well as increase delivery efficiency. With increased warehouse and logistics requirements, business models are evolving and creating a vast opportunity for the industrial sector. Furthermore, the shift from retail to urban logistics is generating a change in the demand curve for highly automated and sustainable spaces, encouraging e-commerce and 3PL players to implement micro fulfilment technology to maximise efficiencies and optimise last-mile logistics to boost their businesses,” said Yogesh Shevade, Head – Logistics & industrial, India, JLL.

Dark stores are driving efficiencies, faster delivery capabilities and reducing logistics cost
Dark stores house goods used to fulfil orders placed online, for the last mile connectivity and have the potential of saving anywhere between 10%-30% of logistics costs. Certain wholesale distribution centre businesses are moving towards dark store concepts in India. Since real estate cost in urban locations for logistic activity cannot meet retail rental expectations, dark stores are deemed ideal replacements, as they also serve as cross-dock stores. These can be planned in unused commercial building basements, parking spaces, mall parking, defunct facilities, etc. For grocery business, replenishment to dark stores can be twice or thrice a day, and typical door deliveries will be morning or in the evenings. Some e-commerce players operate daily essentials to enter customer wallets. Hence compliance is not a showstopper.

According to JLL, generally, to handle 1000 Stock Keeping Unit (SKUs), warehouse space can range between 2,000-20,000 sq. ft. depending on product type and Days of Cover (100% inventory cover for number of days). Hence, it is possible to save anywhere between 10%-30% of logistics costs using dark stores.

India urban logistics

The need for greater automation is driving sustainable demand for urban logistics spaces.
Collaborative logistics will also result in a more sustainable urban logistics infrastructure in India, JLL believes. Key initiatives such as vehicle load consolidation, automatic route mapping, data gathering, and analysis, will lead to fewer delivery vehicles on the road and savings on fuel and emissions.

The opportunities with urban logistics in resolving SKU problems are manifold. SKUs are becoming cost-effective real estate alternatives helping companies avoid high traffic areas in cities, serving numerous online stores simultaneously and far more variation per item at a far lower space cost.
Water treatment solutions provider, Va Tech Wabag, has bagged a USD 100 million contract from Green EPC for a desalination project in Dubai

Read more ...

The Delhi Development Authority has unveiled the Budget Estimates for the next fiscal (FY2022-23) with an annual outlay of ₹7,933 crore and receipts

Read more ...

KEC International, a global infrastructure EPC major, has secured new orders worth ₹1,112 crores in its various business segments

Read more ...

Dalmia Cement (Bharat) Limited, a leading Indian cement major and a subsidiary of Dalmia Bharat Limited, has announced the commencement of

Read more ...

Ahmedabad Urban Development Authority has planned to build urban infra projects worth ₹1,900 crore largely related to water supply, drainage

Read more ...

RITES Limited, a leading Transport Infrastructure Consultancy and Engineering company, and the Indian Institute of Technology, Roorkee, have entered

Read more ...

The Delhi Government has planned to build 30 to 35 floors twin towers at ITO at an estimated cost of ₹1,910 crore. The new buildings will be constructed

Read more ...

The construction sector is expected to grow in double digits at 10.7 percent in FY22 in a recovery from a contraction of 8.6 percent last year, aided by

Read more ...

Karnataka Government has approved 87 industrial projects worth ₹4,236.26 crore thereby opening up huge job generation avenues to the locals

Read more ...

IRB Infrastructure Developers’ wholly-owned arm Meerut Budaun Expressway Private Limited has executed a concession agreement with the Uttar Pradesh

Read more ...

KEC International Ltd has secured new orders worth ₹1,025 crores across various businesses including an order for infra works in the Metals &

Read more ...

Dilip Buildcon has secured ₹2,683.02 crore project from Coal India’s wholly-owned subsidiary, South Eastern Coalfield Limited (SECL) in Madhya Pradesh. Dilip Buildcon has already received an LOA for OB removal

Read more ...

Prime Minister laid the foundation stones of multiple projects from road infrastructure, urban development, housing and drinking water supply worth

Read more ...

Haryana Government has planned to launch a 1,000 acres Global City project in Gurgaon and the tendering process for the project is set to start

Read more ...

The Prime Minister has launched 17 infrastructure projects of over ₹14,100 crore covering sectors like road, housing, health infrastructure, industry

Read more ...

The consumer supply-chain firm Steller Value Solutions is setting up 200 integrated logistics parks in 50-million sq ft space across 21 major cities

Read more ...

GHMC is building signal-free highways to tackle traffic woes across the city, informed Mayor Gadwal Vijayalaxmi. Under the SRDP program, the civic body is undertaking developmental works to the tune of ₹8,000 crore, of which ₹2,000 crore

Read more ...

Prestige Group has signed a civil contract worth ₹1,560 crore with Larsen and Toubro (L&T), for construction of buildings and infrastructure development at the Prestige City, Bengaluru. The scope of work includes construction

Read more ...

Century Plyboards (India) has decided to set up a new integrated wood panel manufacturing plant at YSR Kadapa district in Andhra Pradesh involving an investment of ₹1,600 crore, Chairman, Sajjan Bhajanka informed that

Read more ...

The Ministry of Road Transport and Highways of India (MoRTH) has planned to invest a whopping sum worth ₹7 trillion on infrastructure projects in the next 2-3 years. The investment opportunities are across multiple asset classes such

Read more ...

×
Sign-up for Free Subscription
'India Construction Week'
Weekly e-Newsletter on Construction Industry
Get the latest news, product launches, projects announced / awarded, government policies, investments, and expert views.