When it comes to warehousing, some logistics professionals argue that location is more important than cost. But are they right?

In this article, we’ll explore the cost and benefits of both factors and the role they can play in an end-to-end logistics strategy. Let’s dive in.

Supply chains flow in both directions, and a streamlined returns process means customers won’t have to wait a long time to receive a replacement. 

Furthermore, in some instances, getting closer to key markets can also help reduce transport-related greenhouse gas (GHG) emissions, with the last mile being a prime example. At present, . It’s obvious, therefore, that action must be taken to lower this figure. Now here’s where warehousing can make a difference. Research from Accenture shows that positioning warehouse facilities nearer urban areas could . That represents a potentially significant GHG emissions reduction. 

However, it’s imperative to note that distance is just one of many factors used to calculate emissions. While reducing distances can have a large impact on reducing GHG emissions, optimisation of emissions impact by distance requires a detailed analysis and consideration of all factors, including the drivetrain, the type of energy used, the transport mode, the weight and the vehicle utilisation. Any decision taken to decarbonise your supply chain must consider all these factors.

They need to expand their warehousing footprint at a sustainable cost otherwise the whole exercise will be futile. So, to protect their bottom line and create cost efficiencies in the supply chain, is a better strategy to simply search for the cheapest available warehousing space?

Potentially, but not certainly. Increased rental costs need to be viewed in the wider context of economic downturn, where costs are also increasing for transport, energy and labour. Any cost savings achieved by choosing a warehouse with cheaper rent could potentially be negated by increased transport costs. Nevertheless, in the current financial climate, it’s hard to overlook the business case of a more stable balance sheet.

However, it’s not always easy to spot these opportunities. That’s where an integrated logistics provider like Maersk can help. With our network of assets across Europe and the globe, combined with our teams of on-the-ground experts to advise you on the right warehousing, fulfilment and transport options, we can help you strike the right balance for your supply chain. Because in warehousing and distribution, like in life, balance is everything.

To find out more about Maersk's warehousing and distribution capabilities, visit our European Warehouse and Distribution page.