At the intersection of market dynamics and public policy, warehouse location is anything but random

Aurélien Rouquet : The strategies of economic players lead to the structuring of global supply chains. As a result, the warehouse network is determined by the cost of transporting goods upstream and downstream from storage sites, as well as storage costs. A second observation is that some areas are more attractive than others for hosting warehouses. These include entry points into France, such as port terminals, as well as the major consumer markets located between Lille, Paris, Lyon and Marseille.

Aurélien Rouquet : There is the financial aspect, which leads warehouses to be located on the outskirts of urban centers because of land values. Another issue requiring a budget trade-off as part of each company’s logistics master plan is the number of warehouses. The denser the network, the higher the level of service—and the higher the cost. The quality of infrastructure is also an important criterion, starting with roads and then, where a connection is possible, rail networks and/or waterways. Before deciding on a warehouse location, decision-makers also assess the labor market to ensure they can recruit staff with the skills required to operate it. And there are many other criteria. Consulting firms help companies analyze all these variables to make the best decisions.

Aurélien Rouquet : A warehouse is a point for centralizing and pooling flows; it optimizes existing flows and therefore, by its very nature, helps reduce the carbon footprint of goods transport. Environmental criteria are playing an increasingly important role in thinking about future warehouse locations, although there is still room for improvement. Significant efforts have been made regarding warehouse energy supply; the next step is to reduce land take. Industry professionals are already rolling out initiatives in this area, but the French government and local authorities must implement a national warehouse-location policy to accelerate the movement.  

Aurélien Rouquet : There are several types of warehouses: on the one hand, large central buildings with nationwide reach that consolidate flows from suppliers or factories to dispatch goods to different areas; on the other, smaller facilities in urban areas. In recent years, the structure of economic players’ supply chains has evolved with the addition of urban warehousing in order to pool flows within densely populated areas. This trend will intensify because it is beneficial economically, in terms of service quality and environmentally: more and more goods will be distributed in cities; urban logistics spaces will make it possible to centralize and dispatch them efficiently; and last-mile deliveries will be made using low-impact modes such as electric vehicles or cargo bikes.

Aurélien Rouquet : Many of our fellow citizens see warehouses as low-value buildings we do not need, which is completely untrue ! They incorporate increasingly sophisticated technology; some have nothing to envy in the most modern factories, such as the Leclerc facility in Châlons-en-Champagne, and productive activities such as assembly are carried out there. Furthermore, they are essential to the success of a reindustrialization strategy, as raw materials and processed products must be transported to enable factories to operate! In an increasingly fluid world, warehouses are therefore a crucial factor in regional attractiveness. The French government has recognized this in recent years and is seeking to structure its approach, as demonstrated by the establishment of interministerial logistics committees, the organization of regional logistics conferences, and the signing of the State-Afilog charter of mutual commitments for the environmental and economic performance of logistics real estate… But public authorities must deepen and accelerate this work, as countries such as Germany and China are ahead of France and more integrated in terms of logistics competitiveness.

Aurélien Rouquet : More warehousing areas will need to emerge in cities, which is quite a challenge, as few local authorities (or citizens) are truly ready to take that step today. Better dialogue among local authorities, urban planners, architects and logistics real estate professionals will help remove the barriers. The strategic imperative will then become clear to everyone.