By 2050, the global population is projected to reach 9.8 billion, an estimated increase of an additional 2 billion people – in just 30 years. The United Nations has predicted that by that same year, 80% of the world’s population will live in urban areas.
Environmental concerns have influenced urban policy across the world with substantial focus upon the regulation of transport emissions – these pollutants not only affect the planet’s well-being but the health of the population, too. According to the World Health Organisation, air pollution is responsible for the premature deaths of more than 7 million people, annually.
The introduction of Clean Air Zones and Ultra Low Emission Zones (CAZ and ULEZ’s) throughout Europe has had a universal impact on the logistics industry and supply chains. Businesses need their stock to be geographically closer to their urban consumers, yet deliveries can be hampered by emission penalties for conventional vehicles.
As a rare positive consequence of the global pandemic, the environmental evolution of our cities has been accelerated. COVID-19 transformed the way we live our lives. The emergency lockdown measures will eventually be lifted, people will return to work and music festivals will take place again. Yet, the way both businesses and society functions may have changed forever. As we emerge from the crisis, we will seek to improve our quality of life; this will influence the way we use our towns and cities.
During the lockdowns, public space changed from the great indoors to the great outdoors with residents rediscovering natural, green spaces in their local community. Buses and trains were bypassed as people adopted a ‘two wheels or two feet approach’ to transport, whilst consumers rapidly migrated to online shopping.
The ecommerce industry boomed – However, the need to reduce urban congestion, traffic noise, vehicle pollution and their consumption of finite resources, doesn’t go hand-in-hand with the increased deliveries.
How do we increase urban deliveries in an environmentally sustainable way?
Whilst there is no getting away from the fact that the world’s cities certainly have a large carbon footprint, they also offer significant opportunities to drive behavioural social change, which will have a positive impact on climate change. Large conurbations are usually the testing ground for the innovations that radiate out after successful urban trials.
The creation of a green infrastructure within our urban environments is vital when it comes to future proofing our metropolitan regions. It has risen up European policy agendas sharply, spurred on by the huge growth of online retail and the demand for micro-fulfilment centres.
Whilst central Governments and local authorities focus on larger brown-field site gentrification for accommodation or look to create new cycle pathways – granular, tactical redevelopments present a major opportunity for real estate owners, developers and car park operators alike.
Given the pledges made by global Governments to reach net-zero emissions by 2050, there is a rapidly expanding market for sustainable businesses seeking to embrace a resilient carbon-neutral future; making cities more attractive in the process.
The green infrastructure delivers far more than packages for business owners.
We walk past neglected urban spaces every day, without giving them too much thought. Closed retail outlets are becoming an increasingly familiar sight, post-pandemic. City centre car park revenues are also down significantly with office workers now based at home, all or some of the time.
What if they were transformed into inviting places that inspired people to live more sustainably, whilst delivering a host of benefits to property owners?
An integral part of our smart cities, the creation of a greener infrastructure facilitates last mile logistics, improving communities and surrounding ecosystems. Along with the long-term environmental benefits for future generations, the redevelopment of smaller pockets of prime real estate makes a considerable contribution to the bottom line of those businesses that choose to transform under-performing property.
A new generation of customers will immediately engage with sustainable businesses. This generates a snowball effect for further community improvement; attracting more business and encouraging consumer spend.
Business Improvement Districts levies and sustainable development grants from local authorities provide additional funding and any planning required for sustainable redevelopment is often considered favourably. In Scotland, the Energy Saving’s Trust is one organisation offering companies free loans of up to £30,000 for the purchase of Electric Assisted Vehicles. (EAV’s).
The creation of a green infrastructure within our urban environments is vital when it comes to future proofing our metropolitan regions. It has risen up European policy agendas sharply, spurred on by the huge growth of online retail and the demand for micro-fulfilment centres.
Whilst central Governments and local authorities focus on larger brown-field site gentrification for accommodation or look to create new cycle pathways – granular, tactical redevelopments present a major opportunity for real estate owners, developers and car park operators alike.
Given the pledges made by global Governments to reach net-zero emissions by 2050, there is a rapidly expanding market for sustainable businesses seeking to embrace a resilient carbon-neutral future; making cities more attractive in the process.
Efficient use of multi-functional space.
When redeveloped as an urban hub, an under-utilised urban space can deliver substantial revenues from the growing network of last mile operators and couriers facilitating green deliveries for online retailers.
Although cities are all facing similar logistics challenges, cultural diversity and demographics mean that residents of different ages, incomes and backgrounds may all use a shared space in different ways.
Whether they operate as micro-fulfilment centres, micro mobility charging points, dark kitchens or host ‘pick up, drop off’ smart lockers (PUDO), any under-utilised prime real estate can be renovated into a multi-functional urban logistics hub. This can enhance existing facilities and increase the value of the property asset itself.
Multi-modal transportation.
Reports state that the global last-mile delivery market is expected to grow to around £44 billion by 2025, up from £23bn in 2018 and £29bn in 2020. For those investing, this results in a Compound Annual Growth Rate of between 9-10%.
Commercial fleets have begun to adapt rapidly to reduce emissions and improve operational efficiencies; electric vans and hydrogen trucks are becoming more commonplace on Europe’s roads. One leading online retailer has pledged to run 100,000 EV’s by 2030.
EAV’s and Cargo bikes offer a practical solution for deliveries within Clean Air Zones. Major UK supermarket, ASDA has recently found their trial of cargo bikes helped their e-grocery division navigate pedestrianised streets and utilise the growing cycle lane network with no loss of business efficiency.
Looking to the past for future solutions, rail and water networks are also being utilised to deliver goods to urban logistics fulfilment hubs within stations and wharfs for subsequent collection by EV or cargo bike fleets.
Changing transport infrastructure.
More than 200 cities in 10 countries throughout Europe are now operating a Low Emission Zone – a number that is rapidly increasing with air pollution and congestion being top priorities for policy makers. In addition, the cities of Paris and Madrid, amongst others, are planning a complete ban on diesel vehicles by 2025.
With the inevitable switch to public transport, walking and cycling in cities, it is anticipated that many car parks will be under-utilised and fall into disrepair. However, conversion to a private fast-charging EV park for commercial EV fleet parking offers another significant opportunity for car park operators, particularly those within the CAZ and LEZ’s. Individual electric charging stations can be installed to complement traditional parking, creating a new revenue stream.
Residential parking has long been at a premium within cities, so few delivery drivers will have access to charge points at their homes. Entire car parks can be converted to EV charge stations for EV courier fleets to refuel overnight, creating a new class of asset for car park owners and operators.
Whilst no two cities are the same, the logistical and environmental challenges remain consistent. There is a clear need for new models for urban logistics to increase deliveries and improve business efficiencies whilst reducing the environmental and social impact.
The role of the real estate industry is central when it comes to creating sustainable societies due to the increased consumer demand and the cultural shift towards online. Despite the reopening of retail outlets, this looks set to stay after e-tailers rapidly diversified their technology and parcel services to ensure their economic survival during the pandemic.
The growth of the final mile logistics industry and the provision of a green infrastructure provides cost-effective solutions and substantial opportunities for real estate owners, developers and investors to reinvigorate communities. This proves that the environment and business growth don’t need to be incompatible. In fact, sustainability is actually fundamental when it comes to a thriving urban economy; creating cities of the future.
