What is Last Mile / Urban Logistics? These buzz words are more and more common in the Commercial Real Estate world, but rarely are they defined. The terms are used by many in the industry, but are they the same? Even with the internet at our disposal, it is not easy to find a definitive definition for either. However, below are a few of note;
Last Mile Logistics Definition
‘Last mile logistics refers to the final step of the delivery process from a distribution centre or facility to the end-user’ - Cerasis (part of Globaltranz)
Last Mile Logistics, also sometimes referred to as ‘last touch’ or ‘last leg’ logistics, is a process and not strictly a real estate term. As touched on in the definition above, it is the delivery of goods to consumers, or ‘chimney pots’ as known in the industry. Retailers and/or third-party logistics company will promise to deliver goods within a certain time frame and require a suitably located / specified building to facilitate this process. The location could be urban, and also more peripheral to conurbations to service those who live in rural areas.
Urban Logistics Definition
‘That part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and point of consumption in order to meet customers’ requirements’ - Urban Logistics: Establishing Key Concepts and Building a Conceptual Framework for Future Research William J. Rose, John E. Bell, Chad W. Autry, and Christopher R. Cherry
It is difficult to differentiate between the above two definitions, which is no surprise as in many cases they are one and the same with the terms regularly used interchangeably. One distinction that can be made, is that an Urban Logistics building will be centrally located in an urban area, but not necessarily directly linked to the last mile delivery process. It is a broader term that can encapsulate bulk storage, trade and indeed last mile.
The Typical Warehouse
Many research papers and press articles seem to gloss over defining exactly what a purpose-built Last Mile Logistics warehouse may physically comprise of. Clearly, this will vary depending on the end user and their exact business model, but it is likely to benefit from some of the following characteristics;
- Edge of a town/city to reach ‘chimney pots’ within an hour
- Good access to national (for goods in) and local (for delivery) road networks
- E-shape or T-shade configuration (possibly cross docked)
- Circa 30,000 – 50,000 sq ft (definitely sub 100,000 sq ft)
- Low site cover (circa 20-25%)
- 8 – 10 metres eaves (no need for much racking as stock is not held in situ for long)
- Plenty of loading doors and a significant yard
- Good site circulation
In summary, it’s a unit that is effectively a hub to load up vans that deliver to individual consumers (chimney pots) with very little stored on site for any length of time. These buildings are like a Royal Mail Sorting Office for instance, where the building is intensively used for short periods every day. Typical purpose-built facilities may comprise either of the below configurations.
E-shape Urban Unit
So, what is what?
Taking the above into account, perhaps the cleanest way to make a distinction between the two would be as follows:
Last Mile Logistics – The final stage in the process of delivering goods to the consumer.
Urban Logistics – The physical property asset needed to ensure the Last Mile Logistics process can be achieved.
However, it should be noted that some fulfilment centres are also able to facilitate Last Mile Logistics despite not occupying urban areas.
In our next blog we will discussing if the definition of ‘Urban Logistics’ is broadening.