Is a lack of available land getting in the way of the last-mile delivery boom?

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The adoption of last-mile logistics in cities across the UK is accelerating at pace. But is planning policy holding logistics providers and postal operators back from capitalizing on the increased demand for last-mile delivery? Christopher Schiele, at planning and development consultancy Turley, discusses.

The growth of online shopping has seen demand for last-mile hubs grow, with increased requirements for urban logistics facilities in cities and towns across the UK and a linked shift from ‘just-in-time’ to ‘just-in-case’ supply chain inventories, fuelled by fears of a no-deal Brexit and the risk of shortages arising from Covid-19.

Until recently a London-focused requirement, last-mile logistics hubs are now increasingly being sought in urban locations outside the capital, following an enormous 46% growth in online sales last year.

But the success of a last-mile hub relies on one key factor – its location. Hubs require a strategic location in a densely populated urban area with good access to the local and strategic road or transport network. These areas, by the very nature of being in busy and accessible urban locations, already suffer from a lack of space and available land.

Historically, industrial land has been protected through planning policy from change or redevelopment to ‘higher value’ uses (typically residential and retail). However, over the last 20 years, significant areas of industrial land – especially in urban areas – have been redeveloped for housing to feed the ‘brownfield first’ mantra, thereby causing a shortage of supply for much-needed warehouse space.

Government planning policies have increasingly focused on boosting housing delivery, with logistics and industrial development taking a back seat. This has filtered down to local authority development plans and there remain concerns that the industrial sector is being ignored by government – there was not a single mention of the sector in the 2020 Planning white paper and the Industrial Strategy was abandoned in March 2021.

So, what can logistics providers and postal operators looking for urban employment land do? And how can local and strategic/sub-regional authorities help?

Quick-fix solutions to provide essential last-mile hubs are already being adopted by the industry and are becoming increasingly attractive, especially where there is a lack of initiatives in place to help providers secure the required space for logistics at local level. While these are often in the form of a ‘meanwhile’, time-limited use which can be reviewed, adjusted or relocated in line with demands or long-term objectives, there are existing, available assets that carry huge potential for logistics providers and postal operators – retail parks and multi-story car parks.

Working with local authorities to find and use well-connected, low-density and struggling out-of-center retail parks and underused multi-story car parks, and reutilizing them as potential sources of land, can make way for successful last-mile hubs.

We are also seeing new types of development schemes emerging in London, which are being explored by other cities. Horizontal and vertical ‘co-location’ schemes, for example, with residential units sitting above warehouses and logistics hubs or adjacent to them in a masterplanned redevelopment of larger sites, are increasingly being brought forward in the capital – and it’s likely this trend will emerge across other urban areas in the UK. Capitalizing on these new types of development will be key for postal operators and logistics providers to make the most of the e-commerce boom.

But the biggest changes need to be driven from the top. Government must be proactive in strengthening national planning policy and ensuring adequate weight and priority is given to the industrial and logistics sector, so that businesses and operators can meet consumer online purchasing habits in the most sustainable way.

London has lost around 100 ha of industrial land annually over the past decade, compared with a release benchmark of just 37 ha per annum in the now-superseded London Plan (2016), with housing remaining a priority for this space. It’s vital that enough brownfield land in our urban areas is allocated and safeguarded for logistics space.

While there is no denying the importance of housing, we must make best possible use of designated and non-designated employment land, which will always be central to accommodating our last-mile distribution needs. To achieve this, government must encourage and incentivize local authorities to plan positively with the industrial sector front of mind for the inclusion of distribution hubs in strategic locations, to ensure their policies and site allocations truly meet the fast-changing needs of businesses and communities.

By encouraging greater co-ordination of infrastructure planning with spatial plans, we can make sure local industrial strategies are a success and logistics providers and postal operators are given the land and developments they need to make the most of the last-mile delivery boom.

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