Due to housing plans in many European cities, there is less room for city logistics activities. The loss of light industrial areas in and around cities leads to major city logistics problems. How will we receive our parcels at home, how will restaurants, cafés, and shops be delivered?
Many European cities will grow in the coming decades, both in terms of population and activities. Population growth is strongly related to employment growth. The integration of working and living in cities is important to remain economically and socially diverse and also to create local job opportunities for skilled workers in the future.
Moving away from the city?
Companies can look for more space further away from the city. But that does not help a local parcel company, catering provider, service engineer or the plumber. This will create all kinds of new problems. Employees have to travel to work longer (often by car) and delivery vans have to drive further back and forth. That is not good for accessibility nor CO2-footprint. Moreover, the greater distance to the city is a constraint for the use of clean, electric transport. Hubs for city-supporting activities must be close to the city; avoid logistics sprawl.
Amsterdam Alderman Victor Everhardt (Finance) states in his new business strategy that in new urban developments space must be created for light-industrial workplaces and multi-tenant buildings for existing and new businesses. The alderman is rightly concerned. Everhardt: “The logistics, crafts and manufacturing industry are disappearing from the city while they are the engine of the economy in the Amsterdam Metropolitan Area.”
A recent French study concludes: “public actors have recently become interested in logistics, in order to respond to the challenges related to economic and environmental issues. This desire to include logistics, however, is confronted with the development of regional development projects which go to meet the needs of logistics players. The communities seem to accept the establishment logistics on their territory only through the prism of innovation and within perimeters limited activities.”
Urban innovation districts
In their business strategy cities should focus on those industrial and logistical activities that contribute to strengthening the innovative capacity of the city and its region. Give priority to those companies that provide products and services for the region such as bundling city logistics, smart maintenance of buildings and infrastructure, innovation in construction, sustainable data services, clean mobility services, and food delivery.
Part of the existing activities is extensive; they have a large logistics footprint. The result is a low density of companies and jobs. In addition, the average business park is outdated and many of the buildings there are not sustainable.
Value creation: combing stuff and fluff
The strong growth of cities, and the energy transition, require densification. Companies must do more in less space. That does not work with ‘business as usual’. Why are hundreds of wholesale locations for construction and catering, offering the same products, located around one single city? Why don’t companies share their locations? Why don’t they share delivery vans for parcels, construction deliveries and service engineers? Are there options to develop multi-store light industrial buildings or underground? We have to move on from value retention to value creation.
Companies must respond quickly to social and technological changes because the speed of innovation is increasing. This requires new combinations of existing ideas and knowledge; combining ‘stuff’ and ‘fluff’. The economy of the future revolves around the energy transition, the circular economy, industry 4.0, robotization, 3D printing, open innovation, and smart logistics.
The challenge for companies is to develop new revenue models together. Business models that link innovative industrial manufacturing, logistics and service processes (stuff) to the smart use of data (fluff). This is only possible in cooperation between the government, entrepreneurs, and research. In recent years, cities have focused on the development of urban innovation districts around knowledge institutes and business clusters for the development of start-ups and innovative business models.
Business parks around the cities will become ecosystems in which companies and researchers will collaboratively test and improve new technology, services and business concepts in local living labs and innovation districts. That will produce the business champions of the future with impact far beyond their own region. Wouldn’t that be wonderful?
Walther Ploos van Amstel.
Picture: Amsterdam Logistics Cityhub