European warehouse demand surges as e-commerce giants Amazon, Alibaba snap up space
The Coronavirus pandemic is accelerating the growth of e-commerce, including cross-border online sales between Chinese sellers and European buyers. The surge in online shopping has led to a shortage of warehouses in Europe and a record level of regional logistics investment in 2020.
China’s cross-border e-commerce rose 31.1% last year, while overseas warehouses grew by 80%. E-commerce was already growing before the pandemic forced people to stay home and stores to close. The pandemic has likely just sped up the pace of e-commerce adoption by about 12 months. One of the challenges for businesses is to fulfil orders quickly, and companies that once relied on supply chains spread around the world face a shortage of shipping containers, resulting in high delivery costs and long wait times.
Total investment in European logistics last year rose to 38.64 billion Euros ($46.5 billion), the highest on record since 2013. Europe now awaits more demand from Chinese e-commerce players entering the market, led by Alibaba. The company has been expanding its cross-border e-commerce business, primarily through its AliExpress platform and Cainiao logistics arm.
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Anheuser-Busch to invest $1b to expand capacity and sustainability initiatives
Anheuser-Busch will invest more than $1 billion in its US facilities during the next two years, the company has said in a statement. As part of this investment, the brewer, part of AB InBev, said it will spend close to $400 million in 2021 at its 12 major Anheuser-Busch breweries.
Of this total, Anheuser-Busch will spend more than $50 million this year on new seltzer brewing capabilities and more than $100 million for new lines to produce cans, which have increased in demand due to people consuming more at home during the pandemic. During the next two years, the company will spend nearly $100 million on sustainability projects, including solar-panel installments and water treatment.
The operational expansion comes as the fast-growing hard seltzer category is one of the bright spots for the beer industry, which has struggled due to consumers drinking less beer than previous generations, as well as people turning to other alcoholic beverages more frequently. Nearly every major beer company with a presence in the US has introduced at least one hard seltzer offering.
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Amazon to build incubator for startup trucking companies
Amazon has taken the next big step to establish capacity assurance for its delivery network: Grow it in-house. The Seattle-based company plans to launch a program to recruit hundreds of people to start their own trucking companies and haul goods exclusively for Amazon.
The company will create an ‘incubator’ that provides business training and loans for entrepreneurs to start their own trucking companies. Amazon’s delivery volumes have skyrocketed, and it handles about two-thirds of its deliveries in-house, a much higher percentage than three years ago. With e-commerce demand continuing to grow, Amazon is deciding whether it contracts out the haulage or handles shipments itself.
David Glick, a former Amazon executive, said the company’s incubator initiative is aimed more at the future of its business rather than the present. “Amazon is always planting seeds which will grow into trees in five to seven years, so they are looking at delivery capacity several years out,” Glick said.
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