The European logistics sector has undergone remarkable transformations over the past decade, and one of the most promising trends in our sector is the rise of nearshoring. This strategic approach is reshaping supply chains and creating new opportunities for businesses across Europe.
The impact of the pandemic combined with bottlenecks in the global supply chain has led to many companies seeking to reduce the risk of relying on distant suppliers. Nearshoring is now the most common strategy being utilised by European occupiers to minimise supply chain disruption with 54 per cent* having increased or nearshored European inventories.
While offshoring was once popular due to lower labour costs, nearshoring strikes an appealing balance. European countries offer access to qualified labour while minimising logistical complexities and supply chain disruption, providing enhanced certainty of delivery.
Nearshoring also facilitates better oversight of production processes. Businesses can maintain stricter quality control standards, ensuring that products meet customer expectations. Some occupiers are also choosing to bring light production onsite, further mitigating the risk of reliance on long distance supply chains.
By choosing to nearshore, companies naturally benefit from shorter transportation distances. This proximity allows for faster response times, reduced lead times, and improved agility. When disruptions occur (as they did during the pandemic), businesses can swiftly adapt and maintain continuity.
Analysis of leasing activity over the last 3 and 5 years** suggests that markets in Europe have been bolstered by shoring trends. Central and Eastern Europe (CEE) has seen a significant increase in logistics leasing activity. It offers lower costs compared with Western Europe, whilst still providing access to skilled labour and the continent’s large consumer markets. CEE also offers a strong strategic location for nearshoring. It serves as a natural gateway between Europe, Asia, and the Middle East, making it attractive for both logistics and distribution.
Poland is a great example of a CEE country that has invested in improving its infrastructure over recent years to support nearshoring and light production. Positioning <a href=“https://mountpark.com/strykow/“>Mountpark Strykow</a> adjacent to Poland’s two main highways enables occupiers to take advantage of both nearshoring and international supply chain routes. This highly strategic site has immediate access to national and international distribution routes with a New Silk Road rail freight connection to Chengdu, China just 22km away.
Nearshoring is undoubtedly driving the significant growth in demand for modern floor space. As businesses pivot toward sustainability and efficiency, our flexible logistics spaces are becoming crucial to their success. Well specified, high quality Mountpark developments are also more suitable for implementing automated processes, with older buildings often unable to accommodate the physical and technological infrastructure required to support leading global businesses.
Many companies committed to environmental responsibility find nearshoring an attractive option because it aligns with sustainability goals. Shorter transportation distances can contribute to meeting carbon reduction targets. This combined with our focus on responsible development, means we can tailor properties to align precisely with clients’ ESG frameworks. These buildings, especially at the larger end of the size spectrum, are more likely to be built to suit and it is enormously rewarding to deliver completed properties that embody clients’ brand values.
Delivering successful and complex logistics development projects throughout the UK and Europe is what we do best and, with strong demand for space, we are continuing to identify and develop landmark assets. Our portfolio currently spans six countries with consented land bank across Europe’s major supply-chain corridors.
As businesses embrace nearshoring opportunities within the supply chain, they position themselves for success in an exciting and ever-evolving logistics landscape. Nearshoring in Europe is not just a trend; it’s a strategic move that is unlocking growth, resilience, and sustainability for Mountpark clients.
*Source: CBRE and Analytiqa (European Logistics Occupier Survey 2023).
**Source: CBRE Affinius Capital Research
