CASE STUDY: Temporary vs permanent warehouses
Warehouses, distribution centres, logistics hubs, call them what you will (some companies fancifully refer to them as ‘growth enablers’), but any large four-sided building with a flat roof, concrete floor and many aisles of racking, is an expensive undertaking.
Your standard warehouse can cost US $50-million to develop, while most competitively-priced lease agreements will tie logistics companies or end-user organisations into a contract of several years or more.
But, for a growing number of companies, a much shorter timeframe is what is needed, but with the same level of stability, safety and efficiency offered by a permanent building.
This is where Losberger De Boer steps in. The company is the world’s leading provider of temporary and semi-permanent buildings and while events and exhibitions are its bread-and-butter, the logistics sector, especially in the Middle East, is where it is seeing fast growing demand.
“There is a real appetite for our solutions in the GCC region – more so than in Europe,” says Edward Gallagher, business development director, Losberger De Boer. He adds that this shift in demand is also down to the short lead time of temporary warehouse solutions.
“The available land and space to execute additional space solutions is often not the problem (as it can be in Europe), but key decision-makers generally want and need to activate productive usage of available land,” says Gallagher.
“Unless they want to spend years waiting to build a permanent building, Losberger De Boer’s solutions means customers can be delivering revenue from land within weeks instead of years.” When coupled with the versatility of the structures that Losberger De Boer supplies, the winning proposition becomes clear.
“As an example, we have delivered a permanent expansion to a major logistics company’s warehouse facilities in the GCC region, doubling their available warehousing space,” explains Gallagher.
“At another site – a huge construction project – we have delivered a complete new warehouse on the build site itself from where the logistics company (the chosen partner for the mega-project) can run all its operations and house goods and materials on the customer’s site, as opposed to miles away in an existing warehouse.”
This ability to build a warehouse on, or very near to, the actual work site of a client can give a logistics service provider an immense advantage. “We allow for short-term boosts to warehousing and logistics space, enabling customers to test new markets by deploying additional business spaces temporarily, and we also enable them to win new business by allowing them to build warehouses of any size, wherever they need to, even on their customers sites,” says Gallagher.
In addition, the project can be done very quickly. “The ease and speed of assembly and disassembly are key factors,” he says. “The speed that we can move from contract to completion is the main reason many clients choose Losberger De Boer.” He gives a recently constructed 6,250sqm temporary cargo warehouse in the Middle East as an example, which took only 40 days to complete.
However, these warehouses retain the same ISO-certification and the same durability of a permanent building. “The days of temporary structures being ‘tents’ has gone. As our building technology has evolved, we’ve seen more and more growth. In the last ten years, we have developed the ability to erect temporary buildings that last 10 to 15 years or more, and are equal in many ways to permanent buildings,” says Gallagher.
For this reason, the company is seeing the greatest demand from sectors that require the greatest flexibility in terms of infrastructure, which can become a liability if the market turns bearish.
“This has, in turn, driven rapid growth and interest from various business sectors, particularly airport operators, logistics and transport companies, and port operators. The Losberger De Boer business has more than doubled in the last 3 years,” Gallagher tells Logistics Middle East. And Losberger De Boer has helped its clients grow in turn, with many having been able to test new markets and locations and in turn win new contracts without the extensive risk inherent to a newbuild.
The only real downside to such structures is that their certification needs to be renewed more frequently. “Ultimately, Losberger De Boer supplies and builds semi-permanent buildings designed with the intended load factors and usage in mind. Permissions are slightly different to those of a permanent building and as a result permits are often faster and easier to attain, but they do require renewal.”
Losberger De Boer has built enormous logistics hubs in the past, but it can also provide smaller 3/4/500sqm storage, handling and screening facilities. Losberger De Boer has over 70 different types of modular structure and can deliver almost any size in a variety of different shapes and styles. “Currently, in Saudi Arabia, we are building the largest semi-permanent exhibition hall in the Middle East, providing over 6,500sqm of climate-controlled space,” says Gallagher.