"This might be the last time you’ll see a human on the stage here and not a robot," joked Amaury Gariel, Managing Director EMEA at CBRE, surprising the audience at the start of his presentation at the P3 Future Trends Conference in Prague. The pressing challenges of today, however, include not only robotisation and automation, but also the phenomenon of vertical cities. At present, seven out of 10 Europeans and eight out of 10 Americans live in urban areas. And, the only acceptable alternative to the continued sprawl of cities outwards is building higher structures. Vertical cities are becoming the new standard of modern urban architecture, not only in Asia, but in Europe, as well.
The vertical-city concept is not based on faraway visions of the future; it is rooted in economic pragmatism. Transport accounts for as much as 50% of all costs in the supply chain for most types of goods, while statistics show that real estate expenses make up no more than 5% of expenditure. At the same time, proximity to customers is one of the most important factors considered by companies in the process of allocating investment. The questions are, therefore, quite simple – how can transport costs be reduced effectively and, at the same time, how can goods be delivered to customers when more than a half of the world's population live in cities? Gariel believes that the answer is vertical logistics. The viability of such projects is demonstrated by several examples in Asia where financial synergies are created by the combination of a suitable location and the advantage of warehouses that are several-storeys high. Facilities of this kind function as urban retail supply hubs that allow deliveries to be made within short timescales on a 24/7 basis.
"Imagine that the equivalent of the entire population of France or Thailand, that is more than 60 million people, move from the countryside to cities every year. For that is precisely the speed at which cities around the world are growing," said Gariel, explaining why the vertical city concept is the only possible option. The concentration of people in mega-metropolises might be conducive to GDP growth, but the unavailability of real estate causes prices to rise exponentially, hand in hand with the development of commerce and the supply of goods to city dwellers. This is because the higher the number of inhabitants, the more complex the logistical solutions needed to keep the mega-metropolises functioning. As well as cost savings, however, vertical logistics help offset various other social challenges in 21st-century cities, such as traffic jams and, with carbon emissions a fundamental problem, air pollution. According to estimates presented by Gariel at the Conference, investment into vertical logistics infrastructure solutions has the potential to reduce global emissions by 450 megatons of CO2 between now and the year 2020.
According to Gariel, vertical warehouses will be a key feature in last-mile logistics, the last link in the supply chain before goods are delivered to the customer. Every city has its own approach to vertical logistics. For example, warehouses in Hong Kong use elevators to transport goods whereas in Paris, goods are delivered by trucks that use ramps to travel to higher floors.
In fact, multi-storey warehouses already exist throughout the world, including the Czech Republic. One of the most-advanced facilities of this kind was built by P3 for the VF Corporation as part of the company’s VANS brand distribution hub at P3 Prague D8 park to the north of Prague.
All things considered, Gariel believes that going higher is synonymous with moving forward.