The government must set aside land for inner city delivery hubs in order to help e-commerce retailers, a new report on the UK logistics sector has found.

The Addleshaw Goddard report highlights the exponential e-commerce growth and the need for online stores and delivery firms to have ‘last-mile’ distribution hubs in urban locations. It says that housing is being prioritised and the lack of space in UK cities is driving higher land and rental costs.

Online sales are predicted to make up more than a fifth of UK retail by 2020, with the report estimating that 18 million square foot of warehousing is due to be built over the next 12 months – leaving a significant shortfall.

Among 13 recommendations, the report suggests that the government should force councils to designate land for industrial use; delegate more powers to local planners; sort out access agreements around new rail connections to logistics hubs; and fund SME development and invest in construction skills.

Out-of-town retail parks were cited in the report as a potential source of land for urban logistics hubs, as they typically have good transport connections and suitable dimensions for warehousing.

Jonathan Powling, partner at Addleshaw Goddard, said: “Our economy is dependent on industrial property and warehousing, well-funded road and rail networks, and a tax system which encourages investment. While it is vital that there are sufficient homes for our growing population, the need for industrial space must not be overlooked purely because it is not seen as a short-term vote winner.”

Tim Robinson, chief executive at delivery firm Doddle, added: “The vast amount of items handled by carriers and retailers means they will still need the ability to consolidate. We will see tech-enabled, high volume, high-throughput national distribution centres supported by hyperlocal distribution facilities that allow for orders to specific postcode groups to be consolidated, be it to parcel shop networks, homes, or offices.”

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