Storing it all
There is no question that Poland has experienced a boom in modern warehouse space. Brian Burrough, partner in TKG Polska, a developer of three modern warehouse facilities in Poland totaling 90,000 square meters, notes that Warsaw had barely 10,000 square meters of modern warehouse space back in 1994 when he arrived. That number has increased to over 1 million square meters of state-of-the-art warehouse space today. Although vacancies increased to the 25 percent range in the early part of this decade, suggesting that the market was a bit overbuilt, they have now stabilized into a comfortable 10 percent rate.
Just skip it
In fact, the Polish warehouse market experienced what some people refer to as the "hopscotch effect." This is most commonly illustrated by the advances in telecommunications services in Poland. The telecommunications infrastructure was so poor in Poland, that they were able to go directly into state-of-the-art technologies, with greater ease than more developed countries that had to deal with the high sunk costs of their robust but obsolete networks. As one manufacturer commented to a developer of warehouse space, he had more warehouse lease options in Poland than he would in Spain or Italy.
The same thing has happened in Poland in the warehouse sector. Modern warehouse space in Poland was nonexistent at the beginning of economic reforms here, permitting greenfield builders to design and build warehouse facilities to accommodate all the latest and greatest technologies. Now it is hard to find a facility that does not already make efficient use of space via palletization and bar coding to ensure accurate and real-time information on the flow of a users' goods.
But good may not be good enough. In the race to lower costs in the face of dropping barriers to trade and increased competition, the longer a product sits somewhere, the more it costs the owner. The unfortunate confluence of the current Polish road system (which indirectly increases the cost of transportation and therefore the cost of goods sold-see story in this section), together with the extremely price conscious Polish consumer, puts extreme pressure on margins, forcing the need for greater flexibility.
And in that process, the needs of those who finance the warehouses are starting to collide with the needs of the logistics companies.
Caught in the middle
"More and more manufacturers are seeking to outsource not just the transport but also the storage of their products," says Burrough. "We have been seeing fewer manufacturers as tenants, and more and more logistics companies. The problem is, the manufacturers and logistics companies measure their business in the number of pallets. The manufacturers want flexibility, turning their storage costs from fixed to variable. The developers and investors in warehousing measure their business in terms of square meters; they want fixed leases for long periods of time. These two needs are at direct odds with one another, and the developers/owners of warehousing are in the middle, together with the logistics companies."
Different companies are now looking for different ways to deal with this increased demand in flexibility. Burrough observes that some larger logistics companies have already decided to build and own their own warehouse facilities, taking on the fixed cost of this item.
One option may be dispensing with the warehouse altogether. Katarzyna Nowakowska, communications director for VOS logistics, an international logistics firm, says that "many logistics companies are seeking to warehouse their products in the transport container itself, saving not only on storage costs, but also the time and expense of loading and unloading." VOS Logistics Polska uses this approach.
Other options include adding warehouse space as you need it. Nowakowska points to several new technologies for rapidly assembling a building on a site, as the space may be needed, and then disassembling when the need passes.
Just skip it
In fact, the Polish warehouse market experienced what some people refer to as the "hopscotch effect." This is most commonly illustrated by the advances in telecommunications services in Poland. The telecommunications infrastructure was so poor in Poland, that they were able to go directly into state-of-the-art technologies, with greater ease than more developed countries that had to deal with the high sunk costs of their robust but obsolete networks. As one manufacturer commented to a developer of warehouse space, he had more warehouse lease options in Poland than he would in Spain or Italy.
The same thing has happened in Poland in the warehouse sector. Modern warehouse space in Poland was nonexistent at the beginning of economic reforms here, permitting greenfield builders to design and build warehouse facilities to accommodate all the latest and greatest technologies. Now it is hard to find a facility that does not already make efficient use of space via palletization and bar coding to ensure accurate and real-time information on the flow of a users' goods.
But good may not be good enough. In the race to lower costs in the face of dropping barriers to trade and increased competition, the longer a product sits somewhere, the more it costs the owner. The unfortunate confluence of the current Polish road system (which indirectly increases the cost of transportation and therefore the cost of goods sold-see story in this section), together with the extremely price conscious Polish consumer, puts extreme pressure on margins, forcing the need for greater flexibility.
And in that process, the needs of those who finance the warehouses are starting to collide with the needs of the logistics companies.
Caught in the middle
"More and more manufacturers are seeking to outsource not just the transport but also the storage of their products," says Burrough. "We have been seeing fewer manufacturers as tenants, and more and more logistics companies. The problem is, the manufacturers and logistics companies measure their business in the number of pallets. The manufacturers want flexibility, turning their storage costs from fixed to variable. The developers and investors in warehousing measure their business in terms of square meters; they want fixed leases for long periods of time. These two needs are at direct odds with one another, and the developers/owners of warehousing are in the middle, together with the logistics companies."
Different companies are now looking for different ways to deal with this increased demand in flexibility. Burrough observes that some larger logistics companies have already decided to build and own their own warehouse facilities, taking on the fixed cost of this item.
One option may be dispensing with the warehouse altogether. Katarzyna Nowakowska, communications director for VOS logistics, an international logistics firm, says that "many logistics companies are seeking to warehouse their products in the transport container itself, saving not only on storage costs, but also the time and expense of loading and unloading." VOS Logistics Polska uses this approach.
Other options include adding warehouse space as you need it. Nowakowska points to several new technologies for rapidly assembling a building on a site, as the space may be needed, and then disassembling when the need passes.
