The Evolution of Logistics Networks and What it Means for The Future of Cold Storage - SEPTEMBER 2018 - RWTA
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The Evolution of Logistics
Networks and What it Means for
The Future of Cold Storage
SEPTEMBER 2018
LOGOS is growing a leading platform throughout Asia Pacific, with presence
in all key markets
LOGOS Global Platform
15 ventures globally with over
A$4.2 billion total equity commitments1 BEIJING
CHINA
CHINA
SHANGHAI
>A$9.8bn target AUM2
GUANGZHOU
INDIA
MUMBAI
BANGALORE
43 assets (over 100 properties) located across 7
countries KUALA LUMPUR
SINGAPORE
JAKARTA
Over 140 executives located across Australia,
China, Singapore, Indonesia, Malaysia and India.
AUSTRALIA
BRISBANE
SYDNEY
MELBOURNE
New Zealand
1. Includes equity commitments in approved new ventures !2
2. Based on full deployment of existing ventures
LOGOS Group
!3
LOGOS Tenants
!4
Evolution of
Disruption of the supply chain and Logistics
how property is responding
Networks
The Evolution of Retail Logistics – The Landscape Has Changed
Direct store replenishment by suppliers or wholesalers
Suppliers Shops
1970s
Centralization of deliveries through retailer distribution centers
Suppliers Shops
1980s
Retail Distribution Centers
Overseas Supplier Retail Import Center The rise of global sourcing Retail Distribution Center Shops
1990s Domestic Supplier
E-Commerce model involving parcel network Returns
E-Fulfillment Center
Customer home
Collection point
2000s Parcel Hub Sortation Center Parcel delivery center
Delivery point
Local depot (urban logistics)
Global Trends Disrupting Supply Chains
The explosion of eCommerce, increased customer expectations, and the global
rural-urban migration have combined to reshape supply chain networks
Digital Buyers in North America
E-Commerce % of Total Retail Sales 2014 - 2019E Who Believe Same-Day Delivery
30% Is Important, by Generation,
2013 & 2015
23% % of respondents
15%
31%
Millenials (18-34)
30%
8%
0% 23%
2014 2015 2016 2017 2018 2019 Gen X (35-49)
19%
China South Korea Japan Australia India Indonesia
Asia Pacific
17%
Baby Boomers (50-64)
13%
10%
Seniors (65+)
% of Population Living in Urban Areas 5%
87 1990 2014
86
81 80 80 822050
75
71 73 71 71 74 22%
64 66 Total
18%
56 54
48
40 43 0% 10% 20% 30% 40%
32 31
2015 2013
North America Europe Aisa Woldwide
Solutions to address this change: City Distribution Centres Toll Enterprise, Prestons NSW – LOGOS Facility The Toll Fulfilment Centre has been developed in close collaboration with Specialty Fashion Group, Australia’s largest women’s fashion retailer. The use of automation allows approx. 35,000 separate units to be picked up per hour as compared to 90 units with manual picking.
Emerging alternatives: Urban Fulfillment Centres - USA Amazon Prime, New York USA Amazon’s Prime Now Urban Fulfillment Center on the 5th floor of 7 W. 34th Street, Manhattan delivers tens of thousands of products in less than 2 hours to prime users in Brooklyn and Manhattan.
Solutions to address this change: In-Store Pick Up, Pick-Up Lockers, and
Fulfillment from Store
In-store Pick-up Omnichannel (Ship From Store)
Solution Example Companies Depiction
Pick-up lockers (stationary and mobile), parcel pick up pointsThe Cold Storage Sector
What This Means to the Cold Chain Sector
Cold Chain faces the same challenges as dry goods but must also contend with
perishability and higher storage and shipping costs
Fresh food accounts for more than 40% of However, fresh accounts for less than 20%
FMCG Groceries in China of online FMCG Groceries
RMB RMB
millions Grocery Market by Good Category millions Online Fresh vs. Online FMCG
14,000 1,800
1,350
10,500
900
7,000
450
3,500 0
2013 2014 2015 2016E 2017E 2018E 2019E 2020E
0
2013 2014 2015 2016E 2017E 2018E 2019E 2020E Online non-fresh, packaged, beverages/other FMCG
Online fresh
Fresh Packaged food/beverages Other FMCG
Online Penetration of Groceries by Good
Category
20%
This imbalance is evidenced by the lack of
15%
online penetration of fresh versus non-
10% fresh goods
5%
0%
2013 2014 2015 2016E 2017E 2018E 2019E 2020E
Fresh food online penetration
Non-fresh FMCG online penetration
Overall FMCGRange of Solutions to Address Delivery Speed vs. Cost
Fresh Food E-tailers are experimenting with different business models to meet the
expectations of fast, fresh, and economical food delivery
Omnichannel: physical stores with Urban Fulfillment Centers to Warehouses to homes:
storage at the back, fulfilling online homes: physical outlets close to warehouse on city periphery with
orders in a nearby community e.g. homes, but only serves to fulfill deliver times from 1-2 days, often
Hemaxiansheng (delivery times within online orders e.g. Amazon Fresh, offer delivery windows e.g. Ocado,
30 minutes) Fruit Day: delivery times in 0-1 day Fresh Direct
and offer delivery windowsCase Study: Fruit Day (China)
Economics drove Fruit Day to shift from Omnichannel Model to Outlet Model
Fruit Day’s Operation in 2015 vs. 2016
May 2015 December 2016
0 offline retail stores, ~30
front-end warehouses in
~50 offline retail stores
Shangai, allowing within
1-hour delivery
Daily purchases: 200-300 Daily Orders: 1500
City coverage: ~200 City coverage: 86
Rent: RMB 45k/month Rent: RMB 15k/monthCase Study: Starbucks vs. Luckin Coffee (China) Homegrown challenger forced Starbucks into Omnichannel Offering
Solutions to address this change: Cold Store
Click and Collect Refrigerated LockersLOGOS’ Insight and Experience Australia Asahi, Heathwood Logistics Estate, Queensland Hilton Food Australia, Heathwood Logistics Estate, Queensland • The facility incorporates state of the art warehousing • Hilton’s business model involves large scale, extensively technology, with satellite multi deep racks with an Automated automated and robotised meat processing and packaging Storage & Retrieval System (ASRS) and Storage and Retrieval operations. Machines (SRM) operating within racking aisles to carry out, • Developing robotics technology has been extended in recent put-away and retrieve pallets from the racking and loading years both in the production environment and to the sorting of bays. finished products by retailer store order. • This facility is used to efficiently deliver thousands of beverages to its retail clients, which ultimately improves its service to the end customer
LOGOS’ Insight and Experience China Hangzhou Metro • LOGOS is developing a 37,000sqm facility similar in nature to • LOGOS completed a 12,000sqm cold storage retrofit of a newly- the one completed in Australia, which will specialize in the built ambient warehouse space for Metro, which distributes key storage and processing imported food (fresh meat) and perishables such as imported wine and chocolate into the Greater beverages. Yangtze River Delta, from its Taicang, Jiangsu Province location • The facility is located less than a 30-minute drive from • The facility sits less than an hour from Central Shanghai, enabling Hangzhou’s International Airport, and less than a 45-minute it to keep less inventory and prices down at its stores while still drive from Hangzhou’s Central Business District, enabling it to being able to meet all the eCommerce orders those stores receive serve as a key part of the cold chain for the city of 10 million
Other Trends in Local and Offshore Markets Multi-Level Warehouses Tuas South Link 1, Singapore • Six-storey +60,000sqm facility • To complete Q3 2019 • In close proximity to the future Tuas Mega Port • 9m floor to floor warehouse height • Green Mark Platinum Award – the highest accolade by the Building & Construction Authority of Singapore
Parting messages E-commerce is still in early stages of transforming both dry and cold storage supply chains, leaving those who are most nimble in the best position to win
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