Last Link of eCommerce Accounts for Half of Total Supply Chain Costs

Last Link

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Research "Last Link: Quantifying the Cost"

New research from global real estate services firm Cushman & Wakefield, reveals the last link of the eCommerce supply chain can account for 50% or more of total supply chain spend.

  • Cushman & Wakefield finds real estate costs account for only 4.3% of total logistics spend, whereas transportation accounts for 50.3%.
  • Urban depots, despite significantly higher rents, have consistently lower ‘last link’ costs.
  •  An average 20 minutes closer drivetime from an urban depot to the first delivery point creates an average saving of €2million per year.

 

Our findings from using the TLLC model prove why the logistics premium for urban land is worth it due to the enormous savings possible through total transportation costs. Unsurprisingly, the rents for urban land reflect the maturity of the eCommerce market in any given location. We expect rents for urban depots to increase significantly across major European cities as logistics hubs develop further. Strong rental growth potential for last link depots now puts logistics in the same revenue ballpark as traditional urban land uses.

As more people choose to order online, customer expectations about delivery increases and so does the need for air-tight last link strategies. The last link is the most expensive part of the logistics supply chain, but it is also the only link in the eCommerce supply chain in which customers typically have a real-life interaction. Optimising the last link not only has revenue-enhancing potential, it can also improve a company’s overall reputation for excellent customer service.