The Supply Chain Link between Real Estate and Logistics

Nov. 1, 2013
e-commerce is transforming supply chains and real estate professionals play an important role in helping logistics professionals keep up with that transformation.

Real Estate professionals should be every bit as interested in supply chain management as logistics professionals, according to James Tompkins, CEO of Tompkins International, the consulting firm. He made that point in a late-October keynote speech at the Cassidy Turley National Leadership Conference. In it, he answered the question, “Why should real estate professionals be interested in supply chains?” by sharing the top 12 real estate trends resulting from today’s major supply chain transformations. These include:

1.    Retail store square footage peaking soon

2.    Substantial  growth of retail store click and collect

3.    More frequent store replenishment

4.    Greater emphasis on inland ports, free trade zones, and rail

5.    Increase in nearshoring to Mexico and more transit through Port of Prince Rupert

6.    More large distribution centers (DCs), especially on the East Coast

7.    The greater the population density, the greater the number of logistics facilities

8.    Increased emphasis on the five levels of fulfillment centers (FCs)

9.    More FC 3PLs for pure online retailers and small omnichannel

10.  More combined DC/FC for large omnichannel

11.  Growing automation in DCs, DCs/FCs, and FCs

12.  Increased emphasis on regional transportation and reduced emphasis on nationwide transportation

“If I had been speaking to an audience of supply chain professionals, I would have reached a similar conclusion—that the evolution in real estate is equally important for supply chain professionals, and those in supply chain who fully understand the significance of real estate will do a superior job for their clients,” he wrote in his most recent newsletter.