Chinese Logistics Partnership gets funding to grow its logistics realestate footprint
As logistics companies scamper towards tightening and optimizing their supply chain processes, they are confronted with two major frontiers – last-mile delivery and warehousing. While the former usually addresses challenges concerning visibility and route optimization, the warehousing conundrum involves bolstering facilities through extensive and sustained investment over a period of time.
In many ways, China is surging ahead in the race towards creating futuristic warehousing spaces, buoyed by an exploding e-commerce scene at its wake. With the potential of automation on the warehousing floor, conventional warehousing methods are falling out of vogue, as robots are phasing out human workers from the space – as is evident with the modern warehousing facilities being built in China now.
However, as cities overflow their borders and expand rapidly, real estate prices are hitting the roof, leading to a dearth of vacant spaces to construct new warehouses in. One of the nagging issues with warehousing is the existing conventional spaces which make up a bulk of the total available warehouse inventory. For instance, modern warehousing in the U.S. accounts for only 11% of the country’s total warehouse inventory.
Logistics companies around the world are now waking up to the reality of modern warehousing and are now investing heavily in real-estate to cash in on the logistics real-estate wave. The Chinese logistics association between the Canada Pension Plan Investment Board (CPPIB) and Goodman Group, the Australian global logistics real-estate expert, is now pouring more resources into their already well-fed partnership, by announcing an additional $1.75 billion of equity – taking their total investment to $5 billion. In this fresh round of financing, 80% of the funds would reportedly come from CPPIB.