One of the most positive, disruptive trends in logistics is the innovation of the logistics park. A logistics park is more than just a warehouse or distribution center. Logistics parks offer full supply chain management resources, from warehousing to distribution infrastructure, including value-added services like multi-modal transportation, cold storage, eco-friendly building design, and more. However, the most feature-rich logistics park may not be the best value if it doesn’t have access to air, road, and ocean connections as well as industrial zones. A multi-modal logistics park with the right proximity to transportation and industrial zones can enable freight and distribution while offering warehouse space. Some benefits often include easy access to main highways and nearby navigable waterways to speed the movement of goods and control transportation costs.
Where logistics parks are built
Where a logistics park is built can greatly affect its success. Because the logistics sector is so closely aligned with industrial manufacturing, logistics parks are often located in or near industrial zones, but not always. A transportation hub may be more valuable a location than any particular industrial area, but ideally, both industrial and transportation resources should be in proximity to logistics parks. Additionally, emerging markets such as high-growth countries in Africa are becoming key strategic locations for many logistics parks
What geographical and infrastructure characteristics determine where logistics parks are built?
The best logistics real estate offers access to major modes of transportation such as land, sea, and air while providing an ability to scale.
For example, an industrial space might seem like a good location due to its proximity to a rail line, but if this location can’t support warehouse construction because it’s too crowded already, it might not be the best location for a logistics park.
Of course, not all logistics parks will have access to all types of transportation. Seaports might not be close enough to major population and consumption centers to make sense – one reason Agility has a logistics park in bustling but landlocked Lahore, Pakistan.
Other considerations in logistics park development might include the overall industrial development in the area or region. If data shows tremendous business growth in a particular region, this might indicate a strategic location for a logistics park that can support not just current but future supply chains.
What are some examples of successful locations for logistics parks?
One successful new logistics park was built in Maputo, Mozambique, on the new Maputo ring road in the Marracuene-Chiongo district. This strategic location provides a competitive advantage due to its close proximity to both South Africa and competitive markets north of Mozambique.
With accessible transportation via major highways and roads, this Agility Logistics Park is a multi-modal logistics park of 290,000 square meters and offers 32,000 square meterswarehousing space for storage, assembly, packaging, distribution, and freight.
How do stakeholders choose a location for a logistics park?
As with a successful business park, a good logistics park is all about location. As such, choose a logistics park that is also close to an existing business park or industrial park since this real estate likely has access to customers and suppliers in addition to important transportation infrastructure.
However, while transportation infrastructure is critical, it will provide little advantage if the logistics park is in a location far away from a target market or other essential supply chain needs. Smart stakeholders should assess different pros and cons of a location, including transportation access, local laws and regulations, access to critical markets, proximity to supply chain networks, and other important considerations.
For example, one location might have great access to a target market, but the current instability of the region might add more risk than is acceptable for a business. However, this may be mitigated by a logistics park that offers the best in security and backup systems.
It’s also important to have a thorough understanding of any local, state, and national regulations and laws to ensure that the logistics operations can comply with these rules.
What access to air, ocean, and road connections means for your logistics cycle
Access to air ocean and road connections can make all the difference for your logistics cycle. Without good access and a feasible transport system, your logistic efforts could be hampered.
Planning for more than one mode of transportation is critical for ongoing risk management. Don’t just rely on ocean freight with an occasional truckload as a backup if a shipper has a problem. Strong supply chain management considers not just short-term needs but long-term contingencies as well as the impact of transportation on inventory and warehousing needs.
Why is it important to have access to air, ocean, and road connections in a logistics park?
Logistics innovations are being developed to take advantage of new supply chain routes and advancements in international trade. Utilizing a multi-modal transportation network can boost market access, enhance delivery speed, and save on freight and shipment costs.
What can happen if one mode of transport connection is not included in your logistics cycle?
In short, if your business relies on one or two methods of transport, such as air freight, you could be vulnerable to supply chain disruptions. Good transportation management must include redundant logistics networks and systems to avoid a complete shutdown of transportation. For example, if air cargo becomes unavailable, your business will be prepared to switch to another mode of transport.
The recent shipping crisis and supply chain breakdown that occurred as a result of the COVID-19 pandemic is a strong example as to why smart companies should plan ahead for disruption, natural disasters and other problems that could interfere with business continuity.
How can AI and business intelligence improve your logistics cycle and access to air, ocean, and road connections?
The future of supply chain management relies on artificial intelligence (AI), which can quickly assess and analyze transport systems to identify the most efficient and cost-effective way to transport cargo. This can be accomplished via supply chain control towers, which can almost instantaneously adjust logistics routing based on real-time data.
Multiple methods of transportation across land, sea, and air can be leveraged using AI. Through comprehensive data analysis, business intelligence can guide decision-makers on how to best optimize supply chain management.
Why to look for a logistics park near industrial zones
Why situate a logistics park near an industrial zone? Existing industrial centers can be a great place to set up a logistics facility because of the available infrastructure and proximity to transportation. They allow companies to be close to customers, suppliers and other business partners.
Remember, a logistics center that has expanded into a park is more than just a warehouse. It also serves as a distribution center that enables the processing of freight, from shipping to customs clearance.
What constitutes an industrial zone?
An industrial zone is a special economic zone that has been designated as an industrial space by the local government. This real estate differs from residential and commercial zones in that industrial development and manufacturing is allowed in this area. A strong industrial area may include good transportation infrastructure such as ports and major roads as well as warehousing space.
What are the main benefits of a logistics park near an industrial zone?
A logistics park near an established industrial zone can benefit from the existing transportation infrastructure available. It also potentially gives a company access to the raw goods and products being produced in the nearby industrial park or business park.
If other business parks are nearby, a prime logistics park location can also facilitate joint venture initiatives and other incentives to help boost your company.
What should you consider about your logistics needs when choosing a logistics park near a particular industrial zone?
Your company needs to consider not just current but future logistics and growth needs. Given the current global instability in the supply chain, short-term risk mitigation as well as long-term projections need to be carefully considered in any planning. Consider best-outcome and worst-case scenarios for six-month, one-year, five-year, and ten-year logistics planning with multiple strategic paths for success.
Also consider geographic areas of growth. Africa, for example, is becoming a sought-after location for industrial parks due to its possibilities as a profitable and growing market. As foreign direct investment increases and urbanization fuels middle class growth and consumption, many new geographic areas will be opening up for development, providing ample opportunity with low logistics costs and little overhead via outsourced logistics parks from Agility.
How logistics park proximity enables companies
When we discuss proximity in relation to a logistics park, we first want to establish what we mean by “proximity.” Does your logistics park need to be in close proximity to another distribution center, warehouse, logistics hub, or business park? Or is it more important that the logistics property be near a specific geographic location or city for optimal economic growth? Getting clarity on this up front can help determine the best plan of action.
Many factors must be taken into consideration when making a location decision for a logistics park. It should be a strategic location with access to multiple modes of transit. It should also have ample warehouse space.
What can the proximity of a logistics park do for your freight operations?
Of course, logistics cost has to be one of the main factors in assessing freight operations. Ideally, the location of your logistics park will help contain operating costs due to its proximity to major modes of transportation. Labor should also be considered and whether the region has the capacity to handle the expected freight. Also, as the logistics industry evolves and new markets expand (such as Africa), considerations such as future market potential should also be examined.
What can happen if logistics park proximity is not taken into consideration when choosing a location?
Immediate cost calculations, such as current inventory, should not be your primary focus.
If decisions are made on cost alone, a company could box itself into a subpar location simply because it appears to save on initial costs. For example, a logistics park might offer ample, cheap warehouse space, but if it doesn’t have the transportation connections, the cost of shipping could end up negating any benefits from the cheap warehousing.
Strategic questions to ask include the following: Does the logistics park have access to transportation thoroughfares, and what is the long-term outlook for the area? Does that outlook coincide with the long-term needs of the company’s logistics network?
A case study of business success due primarily to logistics park proximity
One successful case study is Cummins, which needed a distribution center located in Ghana. Agility’s Accra (Tema) logistics park fits the bill with its close proximity to critical West African countries, including Ivory Coast, Togo, Benin, Nigeria, and Ghana. This location provides needed supply chain infrastructure and quick transportation via road, sea, and air for freight distribution.
This secure location also offers environmentally responsible warehousing that meets international standards and utilizes energy-efficient building materials to reduce the carbon footprint. Natural lighting and wind-driven roof fans at this facility also help save on energy while helping the environment.
Agility Logistics Parks in emerging markets
As a pioneer and innovator in helping businesses reach emerging markets, Agility is a leader in building and managing smart logistics parks that transform business. Agility’s state-of-the-art logistics parks include robust security, building maintenance, fire prevention and sprinkler systems, continuous power with backup, IT connectivity, temperature-controlled structures, and hazmat solutions.
Committed to sustainability, Agility’s ISO 9001-certified logistics parks offer recycling, waste management, LED lighting, and rainwater harvesting. Buildings utilize energy-efficient construction to not only save on energy costs but lower the carbon footprint.
Agility Logistics Parks strategically locates facilities in key areas to reach emerging markets with ample access to transportation and other industrial resources. Agility helps businesses eliminate hidden costs and lower operational and capital costs while improving quality and delivery time—and they can do the same for you.
Looking for a logistics park for your growing business in emerging markets such as Africa? Contact Agility today.