Quicker, easier, superior. How e-commerce is changing logistics

Shorter and more sustainable supply chains, such as those required for e-commerce and q-commerce (quick delivery), are set to profoundly influence the growth of our sector in Poland and across the entire Central and Eastern European region. This will have a direct impact on the volume and type of warehouse and industrial investment carried out here over the next few years. 

Since 2019, warehouse developers have been responding to increased, and different kinds of, interest on the part of their customers, but the traditional supply chain models they were previously familiar with have been undergoing revolutionary changes. 

One of the reasons for this is that the appetite of e-consumers in the CEE region has been growing almost exponentially: we not only order more and more often, but also expect instant delivery. Fulfilment times are increasingly becoming a bargaining chip when buying, so vendors and suppliers are having to do what they can to meet this demand. 

 

15 minutes of fame 

 

More and more couriers are now providing express deliveries (B2C, B2B, C2C, C2B), especially in large cities, and, for the more “impatient”, often adopting the quick commerce sales model. Among the players in this segment in Poland that have been exhibiting rapid growth are start-ups as well as international logistics and retail giants with a strong market position. 

Immediate delivery requires changes to the existing distribution and storage models. For example, a network of small warehouses is needed in cities, although not necessarily in the most obvious locations.

We have been seeing things moving in that direction. We have also observed that online shoppers are gradually becoming more aware of the environmental and social impact of particular courier delivery services, rather than just of the production and consumption of the goods they order. This, in turn, has resulted in an increase in what is termed sustainable supply – such as services that use greener vehicles in fleets and strive to optimise the route travelled by the goods or the resources involved in their delivery. This type of service from couriers and suppliers is now not only expected by individual customers, but increasingly often also by companies that take sustainable development seriously as well as investors who put a premium on ESG standards. 

 

Controlling the chain 

 

Poland and the CEE region are also becoming a highly attractive investment target due to the need to shorten supply chains and move production processes from remote locations. Thus, an opportunity has arisen for us to become Europe’s industrial and logistics hub. The improving road and transhipment infrastructure as well as the enhanced quality and quantity of warehouse and industrial stock, including the most technologically advanced and sustainable facilities, as well as the fact that employment and business costs are still lower than in the West, are all major advantages for Poland and the countries of the region. 

The drive to develop new, shorter and more global turbulence-resistant supply chain models has been accelerated by the problems caused by the pandemic and the lockdowns. But it is also one of the planks of the Green Deal, i.e. the EU’s socio-economic strategy for the next few decades. This policy involves, among other measures, reducing the distance between the places of where production, processing, cultivation or breeding takes place and the end-users of the goods and commodities, in order to support local economies and improve industrial relations.

Closer production that has been transferred – even if only partially – from another continent to the same region or neighbouring country the goods are consumed in, will reduce not only the operational risks associated with long and complex chains, but also the environmental impact and the costs of ESG. According to McKinsey, the supply chain of an average consumer goods producer on its own accounts for up to 90% of its total environmental and social footprint. 

Author: Ryszard Gretkowski

Vice-Chairman of the Board at 7R

Ryszard Gretkowski has more than 14 years of experience in the Real Estate industry. At 7R he is responsible for the HR and Administration departments. He runs the 7R office in Gdańsk. 

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