“Sustainability is a matter close to my heart”

Expert talk

In addition to operational considerations, logistics facilities of the future must increasingly take environmental and social aspects into account. Because customers, local authorities and investors are setting the bar high when it comes to the sustainability of their real estate projects. Prof. Dr. Alexander Nehm, logistics professor at the Baden-Württemberg Cooperative State University (DHBW) in Mannheim, and Matthias Magnor, Head of the Contract Logistics Division at BLG LOGISTICS, discuss the market situation in contract logistics and the future of logistics real estate.

Matthias Magnor and Prof. Dr. Alexander Nehm

Talk among two experts: Matthias Magnor (left) and Prof. Dr. Alexander Nehm

Alexander Nehm: For logistics service providers, I see two factors in the market that are currently strongly driving the issue of sustainability. Firstly, given the severe limitations on the availability of space in Germany, local authorities are placing great emphasis on efficient, environmentally and socially compatible real estate. Second, real estate funds are taking environmental and social criteria into account as well as the application of principles for responsible investment. What is your experience of this in practice?

Matthias Magnor: Exactly the same. These days, large funds only invest in real estate projects with a robust sustainability strategy. This also has to do with political measures like the EU Taxonomy, which are driving investors in this direction.

AN: The problem in my view is: Where should new sustainable buildings be built? Three years ago, as part of a study for the Logistics Real Estate Initiative (Logix), we found that Germany still had hardly any green logistics facilities. The bulk of the developed space is currently occupied by logistics centers that take little account of environmental or social aspects.

MM: In the 2000s, Germany’s locational advantage was the availability of space, leaving us as investors or tenants spoilt for choice. But for some years now, we’ve seen that suitable sites for logistics real estate are becoming increasingly scarce. However, demand is so high that in the meantime land owners can award the contract to the highest bidder from a multitude of interested parties. The market has shifted from a buyer’s to a seller’s market.

The C3 Bremen

Expert talk on forward-looking logistics real estate

More than just a place of work

AN: This shift doesn’t only affect available sites. Twenty years ago, sufficient numbers of qualified employees were also available; now we’re seeing an acute shortage of skilled labor. The consequences of this are also impacting heavily on logistics.

MM: That’s very true. And we’re going to feel the pinch even more in the coming years. One point in the BLG Group’s favor here is a corporate culture with a strong focus on our employees.

AN: I can imagine that BLG’s standing and its role as one of the largest employers in the region give the company a competitive edge in the highly contested labor market, especially in Bremen. Going forward, being able to offer attractive, holistic workplace concepts is likely to play an even greater role in recruiting and retaining qualified staff in logistics, too.

MM: Creating attractive workplaces is without a doubt an important criterion when it comes to acquiring employees. We are currently building “C3 Bremen”, an XXL logistics center. This sustainable lighthouse project at our home base in Bremen is setting new benchmarks. The building boasts green spaces with quiet zones, plenty of daylight thanks to additional windows in the roof, the facade and the gates, a company canteen with outdoor terrace that supports a balanced diet, and a park with native trees and shrubs and even edible fruits. It goes without saying that ergonomically designed workstations and support for employees through digitalization and automation also play an important part. We want our people to have a sense of wellbeing at the workplace.

View on the XXL-logistics center C3 Bremen

“We want people to have a sense of well-being at the workplace, otherwise we don’t stand a chance on the highly contested labor market.”
Matthias Magnor, Head of the CONTRACT Division

Achieving climate targets together

AN: We’ve talked about the availability of suitable space and developing attractive work environments. Another factor moving the market in contract logistics is climate-friendly concepts. One interesting observation is that carriers set themselves clear climate targets, but often still lack the know-how to improve the carbon footprint in a critical sector like logistics. My theory is that here companies are looking to logistics service providers for support and CO₂-saving measures that will help them achieve their own climate objectives. Is that something you can confirm?

MM: Absolutely. My experience has been that customers are willing to invest more in a solution if it helps them achieve their climate targets. Our existing customers and potential customers, too, are asking with growing frequency what exactly our climate change mitigation targets are, what action can be taken and how measurable it all is. In contract logistics, real estate accounts for a large share of CO₂ emissions. Therefore, it’s only logical that as a logistics service provider we offer answers and find solutions to the demand for climate-neutral or even climate-positive logistics real estate.

AN: In order to be able to fully assess how sustainable a facility is, however, it’s necessary to calculate and reduce the impact not just of the building itself, but also of the transport routes.

MM: That’s a good point and one that ties in directly with C3 Bremen’s outstanding green credentials. For not only does it by virtue of its location have a direct connection to the freeway and the railroad but, via Neustadt port, it is also linked by inland water-way, for example to Bremerhaven.

AN: I see these intermodal transport connections as the right response to the market situation. Scheduling combined transports via rail and waterways has always been an ideal alternative because it reduces the number of vehicles on the roads and saves CO₂. Against the backdrop of the energy transition, it is to be hoped that this topic will gain significant traction.

MM: With C3 Bremen, we’re going down the climate-friendly route from start to finish. The building will boast the largest contiguous roof-mounted photo-voltaic system in Germany to date. We will not only use the energy generated to meet our consumption needs directly on site, but also to supply other BLG locations. This represents an important step in our MISSION CLIMATE target to become climate-neutral by 2030. To achieve this goal, we are reducing emissions across the company significantly by 30 percent in absolute terms, and we will cut those caused outside the company by 15 percent. Our activities to lower greenhouse gas emissions are scientifically assessed and certified by the independent Science Based Targets initiative (SBTi). This commitment fills me with pride because, as the father of three children, sustainability is a matter close to my heart.

The future is growing upwards

AN: In Bremen, BLG is building a holistically sustainable logistics facility, rubber stamped by scientific analyses and certificates. Such concepts always impress me. I actually think C3 Bremen is a showcase project. Did you ever consider building upwards over several levels? That’s how they overcome the scarcity of space in Japan; albeit the problem is far more extreme there.

Japan solves the problem of scarcity of space by building multi-story logistics facilities.

MM: True, C3 Bremen is just single-story, but we’re already working on plans for multi-story logistics facilities. I strongly believe that multi-level buildings will increasingly find their place in the logistics real estate landscape.

AN: When I look at the overall situation in logistics, it’s my firm conviction that long term, buildings will not only follow sustainability criteria but, in light of the growing need for Europe and Germany to achieve energy autonomy, will also be designed to be energy self sufficient or even energy positive. Given your own experience, what do you think: Can a focus on sustainable or even energy-autonomous logistics real estate be a differentiating factor that gives you a competitive edge in contract logistics?

MM: That has to be a clear yes. We see solutions for climate-neutral or even climate-positive logistics facilities as a key success factor. That’s why we will continue to pursue the topic not only in contract logistics – holistic sustainability is on our agenda in all business areas. We believe that this approach is an important criterion for why customers choose BLG LOGISTICS.

More information about C3 Bremen

Matthias Magnor

(born in 1974) has been responsible for BLG LOGISTICS’ Contract Logistics Division since October 1, 2021. The Business Administration graduate draws on extensive expertise in supply chain management, logistics, services and retail and has been active in the logistics sector and shipping industry for more than 20 years.

Prof. Dr. Alexander Nehm

has been working in the field of logistics markets, logistics real estate and logistics locations for over 15 years. Since October 2020, he has held a chair on the study course Business Administration Forwarding, Transport and Logistics at the Baden-Württemberg Cooperative State University (DHBW) in Mannheim. Prior to that, he was Managing Director of Logivest Concept GmbH and Fraunhofer SCS in Nuremberg. Prof. Dr. Alexander Nehm is also a member of Germany’s “Rat der Logistikweisen” (Council of Logistics Experts).

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