The lowdown on Belgium’s e-commerce logistics situation, pre-pandemic
Typically, e-commerce logistics are outsourced to 3PLs1 . Reasons for this include a more flexible legislation around round-the-clock work for this type of occupier, but also an established network of domestic 3PL players with a level of expertise which spans several specialty areas and generations. The downside of this for a humble real estate researcher is a reduced transparency around e-commerce’s market penetration in logistics take-up figures compared to a market with more pure player transactions.
As far as pure players are concerned there has been the odd rare piece of news: Cainiao (a logistics company, yes, but which is directly linked to e-commerce giant Alibaba) made the headlines a couple of years ago with the announcement that close to 100,000 sq m would be developed over several phases at Liège Airport. More often than not though, the headlines have been negative as pure players have spurned Belgium for neighbouring Germany and the Netherlands (due to labour-related issues outlined above), from where they serve Belgian consumers.
Some consumer goods companies dealing with their supply chain and logistics in-house practice omnichannel retail. These types of occupiers have a limited logistics presence in Belgium. A notable example is Nike’s European Logistics Center (300,000 sq m) (see our latest Logistics Outlook report) in Laakdal.
Last-mile delivery is handled by parcel delivery companies from modestly sized parcel hubs and sortation centres. This represents the final link in the chain to the end-user.
So, what’s changed in 2020?
2020 sees e-commerce in Belgium step up a gear as a direct consequence of rapidly evolving consumer habits. So, what has been the impact on logistics? In one word, the answer is growth. It might have been a stretch to expect 100k sq m + pure player big boxes to start mushrooming across the country; rather we are witnessing more of the same, but at increased pace. The proof is in the pudding:
- Parcel delivery specialists DPD and Montea are partnering on a “ultramodern sorting centre” in Vilvoorde. The project is groundbreaking as it concerns a two-storey logistics building (a first in Belgium).
- DPD has been involved in four transactions this year totalling more than 70,000 sq m, including the 9,000 sq m in Vilvoorde.
- Another parcel delivery company, PostNL, is moving into a new sorting centre in Willebroek, the high-tech 8,400 sq m warehouse is in Belgium’s logistics hotspot.
- 3PLs with a clear link to e-commerce which registered deals in 2020:
- Several retailer deals have also been recorded with a likely e-commerce link this year.
In spite of a lack of total transparency around 3PL deals with definite ties to e-commerce, we conservatively estimate e-commerce/omnichannel retail logistics take-up to amount to approximately 22% of take-up recorded thus far in 2020, spread across the Supply Chain Provider and Retail categories below.
The future of e-commerce logistics
Well publicised issues surrounding labour law flexibility, and a forbidding of state aids to webshops by the European Union do not lead us to expect the arrival in Belgium of Amazon, Zalando and co. any time soon – at least at a large scale.
It is more likely that the Belgian e-commerce logistics landscape will keep growing in a similar vein to 2020. Besides, there are other issues that need to be tackled at a governmental level to ensure the sector can cope with the increased influx of parcels and keep growing as required.
To name but a few: dealing with shrinking supply of land in logistics hotspots improving degrading road infrastructure, ensuring fluid mobility both on motorways and at an inner-city level, dealing with potential challenges posed by the potential Brussels congestion charge, as well as the LEZs. Food for thought…
13PL (Third party logistics): conventional outsourcing, which entails entrusting logistical operations to a specialist and putting the tools, expertise and necessary systems in place, with the goal of improving performance (carrying out increasingly varied task).