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Big logistical development to take flight

By Quinton de Villiers

 

The “aerotropolis” concept is gaining momentum in South Africa in line with a growing global transport logistics trend that is facilitating improved global trade.

This is evidenced by the demand from both investors and owner-occupiers for logistics, warehousing and distribution centres that are located within close proximity of these key points of entry and exit.

As more aviation-related and time-sensitive manufacturing and distribution businesses migrate closer to this key infrastructure, our airports and cities will also gradually undergo a radical transformation.

They will no longer be merely city airports, but rather airport cities such as London where Heathrow Airport is a central gateway for many international passengers and goods.

Airports in Atlanta, Detroit and Philadelphia in the United States and Charles de Gaulle Airport, or otherwise known as Roissy Airport, the largest international airport in France and the second largest in Europe, are also the centrepieces of rapidly-expanding “aerotropoli”.

Other examples include Dubai International, Singapore Changi Airports and Amsterdam Schiphol, the foundation of an “aerotropolis” that has been so successful it now has higher growth prospects than the Amsterdam central-business district.

However, Incheon Airport in South Korea and the New Songdo International Business District still stand out as sound examples of an emerging “aerotropolis” and airport-edge city.

Built on a man-made island connected to New Songdo via a 20 km bridge, it is home to Korean Airlines and Asiana Airlines and serves as a gateway for global trade and a convenient entry point into the country for a third of the world’s population.

Impressively, New Songdo International Business District, the airport edge-city located outside Seoul, occupies 6,47 km2 making it one of the largest private sector developments in the world.

It is valued at US$35-billion and can also lay claim to being one of the world’s smartest and “greenest” cities.

According to experts, the international “aerotropolis” market is expected to grow from US$3,42-billion in 2016 to US$7,13-billion by 2023 with a compound-annual growth rate of 11%.

This is considering the demand for swift door-to-door delivery of products, especially high value-to-weight items, such as electronics.

These are ideally suited to airfreight, while airport infrastructure also acts as critical nodes in global production systems by offering unwavering speed, agility and connectivity.

This is evidenced by the number of manufacturers that are also locating to these “aerotropoli” to allow them to move product quickly off the assembly line and onto freighters.

The concentration of these manufacturing activities usually attracts other supporting knowledge and service industries to the “aerotropolis”.

However, the single biggest challenge facing the growth of “aerotropoli”, especially in developing economies, is the sheer costs involved in developing the necessary infrastructure to attract and support development by the private sector.

A case in point is the proposed mid-field development at O.R. Tambo International Airport as part of the larger “aerotropolis” development in Kempton Park, Gauteng.

This proposed new terminal located between the existing runways has been in the pipeline for many years and is essential to cater to the envisaged significant increase in passenger and freight movement at the airport over the years.

A lion’s share of the significant cost will be integrating the new terminal with the existing infrastructure via tunnels that will be developed underneath the main runway to ensure swift and efficient movement of goods and passengers.

The city’s approved Aerotropolis Master Plan outlines more than 20 catalytic projects to be delivered within the next 25 years as part of this ambitious development.

This is in addition to identifying key targeted economic clusters, namely advanced manufacturing, cargo logistics, retail, aviation, cold storage, training colleges, information and communications technology, a medical city and tourism.

Importantly, they will be complemented by e-commerce, as well as research and development hubs, all critical pillars in South Africa’s re-industrialisation strategy.

Meanwhile, the Airports Company of South Africa has already completed the development of the unit load device (ULD) storage facility that will accommodate about 600 empty ULD containers at OR Tambo International Airport.

It has also established the viability of about 187 000 m2 of additional development rights, with a potential aggregate investment value that exceeds R4-billion to support the “aerotropolis”.

Bridgewater Logistics is strategically positioned in the heart of this development as the country’s foremost transport logistics and supply-chain solutions specialist.

However, we have also been closely monitoring proposed related developments around King Shaka International Airport in KwaZulu-Natal, and the international airport in Cape Town, where Bridgewater Logistics recently launched a new state-of-the-art warehousing operation.

Notably, the proposed “aerotropolis” in Cape Town will expand opportunities to a 20 km radius around the existing airport.

It is strategically located between the N1 and the N2 and within close proximity to shipping routes, existing industrial zones, captive catchment areas, port and current freight infrastructure.

Moreover, only 20% of available industrial bulk and 30% of office bulk at Airport Industria has been developed and, therefore, provides substantial scope for further growth.

Importantly, the project also envisages the development of rail and road transport infrastructure to connect the north and south, as well as the Cape Town central-business district and Bellville, two major economic nodes in the Western Cape.

Meanwhile, the planned “aerotropolis” around King Shaka International Airport is intended to support a R1-trillion 32 000 hectare development, housing 42-million square metres of commercial space and accommodating more than a million residents.

Six key investment sectors have been identified for this development, and they include advanced manufacturing; health and pharmaceuticals; aviation and aerospace; tourism; agriculture and agri-processing; and electronics and electrical components.

Transport logistics remains a key driver of economic growth, and these developments should, thus, take centre stage at a time when the economy is in tatters!

 

Quinton de Villiers is the founder and managing director of Bridgewater Logistics with a long and impressive track-record in African logistics and security. Follow Quinton at #InTheFastLane for more insights and expert commentary on African transport and logistics.

 

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