Keeping Pace with E-commerce Growth

According to eMarketer, global B2C e-commerce will reach $2.3 trillion by 2017, and with this extraordinary growth comes a new set of challenges and opportunities. “The final stage of delivery to city center residents and businesses can often be the most expensive,” according to an article by Nicola Davies, Ph.D., in Development magazine. “It can also be thwart with challenges such as traffic congestion, roadworks and loading restrictions.”

Curtis SpencerControlling this last mile delivery will be a point of discussion at I.CON ‘16: Trends and Forecasts, June 9-10 in Jersey City, New Jersey. NAIOP connected with Curtis Spencer, president of IMS Worldwide, Inc., to hear his take on last mile delivery and how it will continue to evolve with the explosion in e-commerce.

NAIOP: Who do you see as early adopters in e-commerce last mile and who are the new companies to watch?

Spencer: There are many new entrants into the last mile game. It is not just FedEx, UPS and USPS anymore. Network design technology, facilities capabilities and route/stop density are key elements that have made these “big three” systems successful thus far, but OnTrack, NFI, Exel Logistics and many others are also delivering to the door for customers.

NAIOP: Which sectors will have the highest demand for new or repurposed real estate for last mile delivery?

Spencer: We believe infill, Type B and C warehouses, closed large retail boxes and other types of 25,000 to 100,000-square-foot buildings can be retrofitted (as a play to add value) into effective e-commerce last mile fulfillment centers. We call these Door Delivery Centers (DDC).

NAIOP: How do you see last mile delivery evolving over the next five to 10 years?

Spencer: These last mile DDCs will be created and retrofitted to serve the growing demand of millennials and others who “want what they want when they want it!” Amazon has rolled out this model, but there are 50-plus other e-commerce players that will need this type of space in key markets to keep up.

Hear more from Spencer and other notable names in industrial real estate at I.CON ’16: Trends and Forecasts, June 9-10, in Jersey City, New Jersey. Visit the conference website for the full agenda, and get an inside look at local industrial projects on the pre-conference tours.

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