📊 Nearshoring drives Europe’s logistics investment growth

Irbis Index February 2024

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News

Mipim 2024 | Nearshoring drives Europe’s logistics investment growth The MIPIM 2024 conference highlighted several key trends affecting the real estate and logistics sectors, with nearshoring emerging as a significant driver of investment growth in Europe's logistics market.

• Nearshoring refers to the practice of transferring a business operation to a nearby country from a more distant one, often to reduce costs or mitigate supply chain risks.

• This trend has been particularly pronounced in the context of European logistics, as companies seek to reduce their dependence on distant manufacturing hubs like China due to geopolitical tensions and supply chain vulnerabilities.

• The trend is expected to continue driving demand for logistics infrastructure as companies seek to bring production closer to European markets.

• Central and Eastern Europe (CEE) are particularly benefiting from the nearshoring trend, with companies choosing CEE for lower labor costs and improved infrastructure. (link)

Global air cargo demand soars by 18.4%, sparking optimism amidst economic dynamics Global air cargo demand has experienced a significant surge, with an 18.4% increase reported for January 2024 compared to the same period in the previous year.

• This remarkable growth has sparked optimism within the industry, despite the ongoing economic uncertainties and challenges.

• The increase in demand is attributed to several key factors, including the rapid rise of e-commerce, disruptions in ocean shipping, and efforts by companies to diversify their supply chains.

• The International Air Transport Association (IATA) highlighted this positive trend, noting that the acceleration of air cargo outstripped trade and production growth.

• Regional performance varied, with Middle Eastern airlines leading the performance chart with a notable 25.9% year-on-year increase and airlines in the Asia-Pacific region witnessing a remarkable 24.6% rise in air cargo volumes compared to January 2023. (link)

Walmart aims to sell logistics software Walmart has announced its intention to sell its artificial intelligence (AI)-powered logistics software, known as Route Optimization, to other businesses.

• This move is part of the retail giant's strategy to diversify its business and leverage its technological advancements to serve a broader market.

• The Route Optimization technology, developed by Walmart Commerce Technologies, aims to enhance supply chain efficiency by optimizing driving routes, packing trailers more efficiently, and minimizing miles traveled.

• This software has been instrumental in Walmart's own operations, helping the company to significantly reduce its carbon footprint by avoiding 94 million pounds of CO2 emissions through the elimination of 30 million unnecessary miles and optimizing routes to bypass 110,000 inefficient paths. (link)

Bp Pulse expands electric charging network with acquisition of key UK truck stop Bp Pulse has acquired the freehold of Ashford International Truckstop, one of the UK's largest truck stops, as part of its initiative to create a Europe-wide network of electric vehicle (EV) charging stations for trucks.

• The truck stop is strategically located near Dover and the Eurotunnel terminal in Folkestone, which are key points for HGV traffic crossing the channel.

• Bp Pulse plans to lease the site back to Ashford International Truckstop Ltd for continued operation of the existing facilities, while Bp Pulse will manage the EV charging infrastructure.

• The Ashford site has the potential to host approximately 20MW chargers, and Bp Pulse is working with energy infrastructure partners to enable power connections for the project. (link)

Ocean Alliance launches Day 8 network The Ocean Alliance, which includes CMA CGM, COSCO, Evergreen, and OOCL, has launched its new east-west network known as the "Day 8 Product."

• This marks the eighth year of the alliance's operation, following the recent renewal of their cooperation until 2032.

• The Day 8 network will utilize 321 vessels across 35 services, a reduction from the previous year's 40 services and 353 ships.

• The changes include a decrease in the Asia-North Europe network from seven to six strings and in Asia-Middle East services from four to three strings.

• Two Asia-Red Sea services are suspended until further notice due to instability in the region.

• The transpacific will have 12 Asia-North America west coast, eight Asia-US east coast, four Asia-Med, and two transatlantic services.

• However, detailed port rotations have not been disclosed, leaving some uncertainty about the specific operations of the alliance. (link)

Other headlines 

Stonepeak has completed its acquisition of Textainer Group Holdings, one of the world's largest intermodal container lessors.

XPO Logistics has partnered with TotalEnergies in the UK to provide logistics services for the distribution of packaged lubricants.

Ireland's Primeline Group has acquired a majority stake in Northern Ireland's Global Cargo Solutions.

450,000 sq ft logistics scheme delivered in Worcestershire.

Wincanton's board unanimously recommends proceeding with GXO Logistics' improved £6.05 per share offer to acquire the company.

Descartes Systems Group reveals that 76% of supply chain companies are impacted by labor shortages, with 37% indicating a high to extremely high impact.