Multi-location distribution may solve supply challenges

Companies will increasingly need to be more agile and flexible in designing their distribution networks, according to expert speakers at commercial property adviser Jones Lang LaSalle’s agents briefing in Birmingham. Peter Ward, Cargo Supply Chain Commercial Manager, DP World London Gateway, has claimed that shifts in global sourcing, combined with new and multiple channels to market are likely to drive multiple stocking locations.

Peter Ward said: “In the UK it may prove optimal for a major distribution centre in the South to complement another operating in the Midlands.”

Explaining the logic behind DP World’s massive investment into London Gateway, the UK’s new international hub port and Europe’s largest logistics park, Peter Ward said this approach would be particularly relevant to companies whose key customer base is in London and the South East, the country’s largest consumer market and population centre.

Peter added: “Against a background of escalating fuel costs, London Gateway will save millions of pounds of avoidable costs in UK supply chains.”

Meanwhile, Lisa Fitch, Associate Director, Supply Chain Consulting, BNP Paribas, told delegates that the DP World London Gateway port and logistics park development, which offers almost 860,000 sq metres of space and is located just 147 miles from Birmingham, was well timed given current market conditions.

Lisa said: “From a Midlands occupier perspective, the opening of DP World London Gateway next year is perfectly timed for a number of end users that are grappling with the challenges of the recession and are having to accommodate multiple channels to market.

“The port centric logistics model [where distribution centres are located close to a port to reduce transport distances] at London Gateway will be compelling for many businesses as it adds capacity to the market that will enable end users to reconfigure their supply chain.”

Cameron Mitchell, Director of National Industrial & Logistics at Jones Lang LaSalle, commented that the country could be facing a shortage of distribution facilities.

Cameron said: “There is a shortage of good quality distribution capacity looming as a result of a recession related lack of speculative builds over the last two years.

“We therefore welcome DP World London Gateway’s commitment to offer a substantial common-user facility from which businesses can either benefit from incubator or shared space - whilst gaining flexibility in their supply chain - and if the business case is right for them to later move into their own facility.”

Richard Meering, Senior Director, CBRE, added: “We welcome the London Gateway development.”

“This, along with DB Schenker offering rail services from London Gateway to the Midlands, highlights the potential supply chain benefits that end users can gain by utilising London Gateway in conjunction with Midland’s DCs alongside rail hubs such as DIRFT (Daventry International Rail Freight Terminal), Hams Hall and BIFT (Birmingham International Freight Terminal) at Birch Coppice”