Significant'growth'opportunities for Australian'companies as a result of'COVID-19 restructuring'are there for the taking'according to'Industrial & Logistics sector'research'by CBRE.'''

Restart the Uneven Recovery ' Industrial & Logistics, a'market outlook by international'real estate services and investment firm, CBRE'looks at macro trends, drivers of change'and'the big needle movers'for ongoing growth.'

Findings'Overview:'

• Warehouse location has never been more important.'The transport and warehousing sector will help drive a rebound in industrial GDP.'

• A resurgence in local food processing and government stimulus are driving demand in manufacturing and construction'

• E-commerce influx is creating challenges around reverse logistics and delivery times.'

• The type of products being returned drive the requirements for secondary grade facilities ' with a trend towards lower ceiling heights to accommodate high touch, slower processing and the varying size of the pallet loads makes them difficult to stack or safely store in high racks.'

• An additional 350,000 sqm of new warehouse space each year will be required to facilitate growth in ecommerce.'

We spoke to'report author,'Kate'Bailey,'Associate Director,'Research Director'at CBRE'about some of the standout trends'they have discovered.'

Overall'economic outlook'for'the supply chain'

Kate Bailey:''Thinking about where we were this time last year and the economic outlook that we thought that we'd have,'the'economic bounce back'has been surprising. The market performed really well'and there has been'a huge spike in growth from the retail sector'in particular,'but we also saw that with electronics.'Typically,'Australians tend to spend'about $60 billion overseas, but then only spend $30 billion in Australia, so because'Australians'have not been'travelling,'we have so much'cash floating around that'resulted in people'spending money on themselves here.''

We also saw'a lot of supply chains'break down and'a lot of pressure being put on those supply chains'especially those that'had moved to just-in time-models where'prior to the pandemic, they'didn't'hold'on'to stock and that really impacted them.'''

Warehousing'

Warehousing for products waiting for export, and imports awaiting customs clearance have been impacted significantly. Conversely some warehouses have excess stock that they are unable to transport and need increased storage space.'

KB:''One of the'big things we're seeing is'warehouse occupiers'become much more savvy about their location and even'their'micro location.'Only'5% of'supply chain costs go'to rent while 50% of that goes to'transport costs.'The more that customers'want'more timely'deliveries, the more companies are revising their'network configurations. For example,'they are'considering how'regional'centres'fit in with their larger distribution'centres'on the urban fringe'and'how they can make sure that those deliveries can take place.'

Overall, there is now'greater'sophistication'in warehousing'' rethinking locations and adopting technologies to streamline operations.'For example, they are looking more at robotics and automation to encourage'social distancing.'''

Shipping & Transport'

Although demand'is still high, the pandemic'has caused some'supply chain'challenges for the'shipping'industry.'Conversely,'road transport has experienced'a resurgence with'the increase in demand for food'prompting transport'companies'to boost'driver numbers to facilitate demand.'

'The growth in road transport services is very much'linked to e-commerce as well'as the'challenges last year with border closures. It's all just'reiterated the importance of road transport and how it's such an essential part of our network in Australia'and our'e-commerce process as well.''

Food Warehousing & Cold Storage'

Stockpiling of food and huge sales from supermarkets has seen the food warehousing and cold storage sector see significant growth which is expected to remain elevated into 2021.'

KB:''There has been a'big uptick in local food manufacturing and demand for cold storage.'A lot of Australia's food is manufactured'locally,'and food processing has been growing as a demand driver for quite some'time,'but'we'saw food sales skyrocket'' so it's not just food'manufacturers'who have benefited but'meal kit groups like'HelloFresh and Marley'Spoon'are'demanding more space as well. Also, at a micro level we have seen the rise of dark kitchens'that are distributed by services like'UberEats,'so food production is moving in inner city'industrial areas'to streamline operations.''

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Read the full report'here.

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