In this episode, Tomasz Szpyt talks with Aleksander Kuźniewski, an expert at 7R, about the impact of e-commerce on the warehouse market.
Good morning. My name is Tomek Szpyt, and welcome to another episode of the 7R.Blog.On podcast. Our guest is Aleksander Kuśniewski—Business Development Director at 7R. GoodGood morning.
Good morning.
Alexander, I think everyone has noticed that trade has picked up.
Yeah, yeah.
Howódid this acceleration translatetoon the warehouse market?
We need to stay on top of market trends—specifically, the growing role of online shopping in our overall shopping habits.
We ourselves are seeing growing interest in urban warehouses. We will be expanding into cities more and more. We will become increasingly visible within the urban fabric.
What challenges does this pose for the developer in terms of integrating the warehouse, whichómaybe associated with a facility thatisis located somewhere on the outskirts of the city? It’s actually closer to the centerócity centers.
This is definitely a matter of social responsibility. After all, we have neighbors. They might protest too. We need to convince them that our warehouse will blend in with the surroundings, that it won’t be a nuisance—and might even turn out to be a benefit—and that it will be aesthetically pleasing and attractive enough not to disrupt the city’s harmony. We happen to be in a somewhat favorable situation in that facilities intended for storage or warehousing services are increasingly being developed by demolishing old structures—such as old factories—and simply replacing them with modern buildings. This also makes it a bit easier for us to convince the community of the need for such investments. On the other hand, sooner or later these warehouses will likely prove useful to the neighbors as well. It might turn out that there will be a parcel pickup point here. It might turn out that it will facilitate the delivery of fast-moving products within minutes or hours, so I think that in this respect, things are looking quite good. Of course, everyone will be concerned about increased truck traffic. However, these deliveries can also be organized in many different ways.
As the director responsible for development at 7R–– where, in whichóare you seeing opportunities for the company’s growth?
The potential for logistics is enormous. There is probably about half a square meter, or 0.6 square meters, of warehouse space per Polish citizen. In the Czech Republic, it’s between 0.7 and 0.8 square meters. From what I’ve read, in Germany it’s one square meter, or even 1.2 square meters. On the other hand, many of our warehouses were actually built in response to demand from the German market, so our supply of space is also somewhat distorted. The potential is enormous in every area. The potential is also enormous in the area of large warehouse spaces—big boxes serving large-scale logistics. Every order that comes to us passes through three or four warehouses along the way. Whether they’re courier companies or companies actually delivering the products. Let’s not forget that later on, returns also need to be handled. That package we ordered with four pairs of shoes—it goes back to a completely different warehouse with three pairs of shoes. For every order, for every click we make online—we probably need about five warehouses. And we’ll be clicking more and more, so the first area is definitely large-scale warehouses and large-scale logistics. What we were just talking about—warehouses moving into cities. We’ll want things faster and faster. Probably ten years ago, when we first got online—sorry, make that twenty years ago—it was totally fine if a product was available within 5–7 days. Now, if it’s not there within one to three days, we’re convinced someone’s running a scam. I’m joking a bit there. What we were just saying—that we’ll need it the same day, or within a few hours. We also need to bring warehouses closer to people, so this format… Maybe it won’t mean moving into city centers. Maybe the answer lies in existing retail facilities and stores. As if for that very last mile, but we’ll have to be on the outskirts of such a city—with the ability to restock those locations within minutes or hours. If it’s operational. That’s the second area. The third area—databases. To handle such massive internet traffic—as a response to all the regulations—we’ll likely need databases and server rooms as well. This is also a direction in which we, as a developer, are capable of responding.
You mentioned ordering four pairs of shoesandand returning three pairs of shoesó. This methodóis actually very harmful to the environment. All those shoe packagesóhave to be transported somewhere. They pass through three or four warehouses. They reach the customer. The customer makes a selection, and those shoes end up somewhere else. This results in at leastcarbon. Howcancan we help reduce the environmental impact of logistics and the warehouse market in general? What role can role of a developer?
We’re already doing this. It’s not a question of “What could the developer’s role be?”, but “What is the developer’s role?”. This isn’t the future. Let’s not view reducing emissions as something that’s bound to happen. It’s something we’ve been doing for a long time. What pleases me most are the simple solutions that are being implemented, which yield significant results. There are air circulators that mix the air and ensure, for example, that the entire volume of a warehouse is heated evenly. There’s additional insulation, thicker walls, and a thicker roof. There are seals at the loading docks. These are many elements that, as a developer striving to place our product in the A++ category, we’re already implementing. These are visible savings in terms of energy consumption. I think that given the current situation, given what we’re seeing in the market—the rise in energy costs. On the one hand, the rise in energy costs; on the other, a growing awareness among companies about the need to care for the environment. We see that the paths of climate expectations and the economic path have converged, so that now the payback periods—even for a photovoltaic installation—are no longer measured in decades; rather, these are actual savings that are easy to demonstrate to clients, showing that it makes sense.
Can you suggest some solutions thatwillwill result in savings for tenants??later for investorsó, and future building ownersó, I don’t know… in a year, two, three, five? Where can we tighten the cost-saving, eco-friendly screw even further? Where can we look for ideas here? In whichóareas?
As for the solutions we can still develop… A few months ago, we joined the Proptech Foundation, an association dedicated to innovation. They introduce innovative products, often from startups—companies that are constantly trying to come up with something new. And we’re part of that. We keep an eye out for such innovations. The future might surprise us very quickly. I think 7R was the first company to introduce standard LED lighting to warehouses. Not so long ago—it’s not that distant a past. Let’s say ten years ago, fluorescent lighting was a basic fixture in every warehouse. And in aquariums, too. 7R was the first company to introduce standard LEDs. Now we’re the first company to introduce standard LEDs with the DALI protocol. This is a control system that allows lighting to be dimmed depending on daylight or motion. And this is one of those innovations that customers previously had to pay extra for. We’re the ones bringing every such innovation to market. We try to stay a step ahead. We try to show the customer: “Hey, listen. With us, you don’t have to pay extra for this. We give it to you as standard, and thanks to that, you gain an extra point in your rating. In the ranking of how you care for your employees. How you care for your employees, how you care for the environment—this building ages more slowly. People work better. When people work better, they’re more effective.
Will new warehouse solutions continue to be implemented? Warehouses will continue to evolve, and this trend will certainly...I, right?
A warehouse will always be a warehouse. In my opinion, solutions will focus on improving its efficiency. Will this be achieved through automation? The challenge facing logistics in general is the workforce. Our clients already have systems like MiniLoad and AutoStore. That’s full automation. Those are robots. Ten such robots consume as much electricity as a vacuum cleaner, so we minimize energy consumption. We maximize efficiency with AutoStore—these are thousands of packages that we would normally have to store in a huge space. Here, we can intensify the use of the building’s volume.
Thank you very much.
Thank you very much.
Our guest today was Aleksander Kuźniewski—business development director at 7R. I’minvite you to the next podcast in the 7R.Blog.On series.
Thank you.
