Spend $7 Billion on Warehousing? Yes, Please!

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July 24, 2015

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Photo credit: Secom Bahia/Wikimedia Commons

Photo credit: Secom Bahia/Wikimedia Commons

*President Obama KARIBU KENYA*

When people speak about logistics, it is usually likely that they are referring to the transportation aspect. Planes, trains, good old fashioned trucks or trusty sea-faring ships; you name it.

The general opinion on logistics involves motion- moving cargo from one place to the other safely, efficiently and in a timely fashion.

What most people outside the industry don’t often consider is the facet of storage. For firms specialising in freighting from supplier to consumer, the issue may not seem particularly major; but remember, the term “logistics” spans much wider than that.

From wholesale supplier, to specialised supply chain management firms excelling in in-house logistics departments, warehousing becomes a key factor that drastically affects the success (or failure) of operations.

It is this need for warehouse talent and of course space that has seen Global Logistics Properties set aside a staggering 7 billion dollars dedicated to expanding and upgrading warehousing in mainland China. Global Logistics Properties (GLP) for those not aware, is a world leader where logistics facilities are concerned.

With major operations across Asia, the USA and South America, some consider GLP the industry benchmark of excellence at what they do. With years of global logistics experience and the deep pockets to finance their vision, this investment in the Chinese supply chain market is a well informed and deeply considered decision.

The economic rise of the East has long been a hot topic across financial and entrepreneurial spheres, and the going seems to be staying good. China’s economy has begun to shift towards a more retail-centric model, with an increase of consumer spending.

This, of course, necessitates strengthening of the channels through which manufacturers reach their customers. Logistics service providers and others involved in the process of storing and distributing goods have created a spike in demand for storage space that investors across the world could not be more excited about.

Legendary names such as Goldman Sachs and the Carlyle Group have rushed to dump capital into this market, encouraged by the strong, continuing growth patterns.

GLP’s investment is geared towards setting up 13 million square metres of warehouses; a figure as impressive as it is hard to conceptualise. This is of course good news for third party logistics service providers, who are the main customers or tenants of GLP projects.

For those of us with dealings in the far East, the next four years during which the planned development will unfold,, are set to be quite exciting indeed. Supply chain managers operating locally or even exporting goods to the region stand to benefit from technological advancements in such things as temperature controlled storage and distribution options, as GLP prides itself on being ahead of the curve in tech-enhanced logistics structures.

Photo credit: CNN

Photo credit: CNN

Speaking of ahead of the curve, if you will allow a small diversion off topic: if you have never heard of a “luxury animal terminal at the airport”, be prepared for a surprise. The John F. Kennedy airport in New York intends to undertake construction of a specialized terminal dedicated to accommodate the animals that pass through the airport. “The Ark” as it will be known, will cater exclusively to animals and be an area of not just housing, but relaxation for the animals as well. If ever a picture was worth a thousand words, this would be it.

Back to the matter at hand, much as this development may seem like a world away, remember that our duty as supply chain managers is to connect not just the nation, but the globe at large. We continue to take notes on adapting to economic trends and work towards getting Kenya to that level as well. Here’s to taking Kenya to the next step!


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