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Huge demand for Durban warehouse space

Home Transport & Logistics Commercial & Fleet Huge demand for Durban warehouse space

WHILE South Africa’s economy continues to reel under the impact of ongoing COVID-19 lockdowns, the ongoing success of two giant Durban logistics hubs represents a welcome dose of good news.

Scarcely one year since moving into its new 16,152-square-metre warehousing facility in north Durban, Rhenus South Africa is expanding its storage space and diversifying its warehouse operations. And at southern end of the city, Fortress’s R4.5 billion Clairwood Logistics Park continues to expand at an impressive rate.

Rhenus – formerly World Net Logistics in South Africa – has seen its Durban warehouse space grow by a whopping 53% in just two years. Increased demand for warehouse space, as well as more service offerings such as the addition of a Special Storage Warehouse (SOS) bond store, are driving strong growth for the global logistics provider.

Strategically located at Northfield Business Park north of the city, within 21 kilometres of King Shaka International Airport and 24 kilometres from the Durban Container Terminal, the warehouse includes 1,250 square metres of bulk handling area and 5,823 racked pallet positions.

The facility offers a range of solutions, including bond, packing and wrapping, unpacking, cross-docking, as well as fine and batch picking. It is also graded to handle food items.

Kishore Kanayelal, Regional Director at Rhenus South Africa, says that the strong growth over the past year can be attributed to a number of factors.

COVID-19 has disrupted supply chains worldwide, with importers increasing their stock levels to ensure reliable delivery to their clients.

“The exorbitant air freight rates are also having a strong knock-on effect, with some customers opting to save on air freight rates through larger consignments, resulting in higher stock levels,” Kanayelal said, adding that another driver in the demand for warehouse space is a growing realisation that outsourcing warehousing can be a cost-effective and efficient solution to stock challenges.

“Overheads, labour, security, Automatic Sprinkler Inspection Bureau (ASIB) compliance, etc. quickly add up. But through shared costs and our advanced warehouse management system, we are able to offer cost-effective, customised and comprehensive solutions.”

Another imminent development is the approval by the South African Revenue Service of a SOS bond store within the Durban facility. This is specifically licensed for the storage of dutiable imported goods, excise goods, including duty free goods for export (in terms of Section 21 (3) of the Customs Act), as well as imported goods for duty and tax-free outlets.

Kanayelal said the SOS bond store will bring additional benefits to Rhenus clients, including improved cash flow as a result of deferred Duty and VAT payments, as well as speed to market.

The company has also seen increased demand for their unpacking and cross-docking services. Kanayelal said clients are increasingly looking to get their goods to market quicker, at a reduced cost. Cross-docking means less handling of goods, reduced labour costs and faster delivery times.

“The growth of our warehousing division is an indicator that our economy is starting to recover – which is good news for everyone.”

Formerly World Net Logistics, the company changed its name to Rhenus Logistics South Africa in December 2020 after being acquired by the Rhenus Group in 2019.

Fast track

Meanwhile, in southern Durban, Clairwood Logistics Park is seeing similarly encouraging growth, according to Grant Lewington, National Leasing Manager at Fortress Logistics.

Located on the site of the old Clairwood Racecourse, it’s taken longer than Rhenus’ site to get off the ground – seven years – but is now a world-class site, “showcasing cutting-edge innovation in storage, transhipment and distribution… leading a new age of logistics innovation reaching across the country and deep into the continent,” Lewington said.

The re-zoning, servicing and environmental provisioning of the site, which began in 2014 saw a R150 million upgrade of road and service infrastructure.

Since Clairwood is located in an old industrial suburb close to the port, new road infrastructure was required. New services connections such as power, water and sewage were also introduced. Stormwater management systems were also completely overhauled. The rezoning of the site also required environmental provisions necessitating the retention of wetland elements protecting existing fauna and flora.

While the whole park boasts 360,000 sqm of warehousing, Lewington said Fortress’s development of individual pockets has been driven almost entirely by client need as “tenants respond to the rapidly evolving demands of a logistics sector double-impacted by the COVID-19 epidemic and ecommerce”.

In 2018, pocket 1, for example, saw 25,000 sqm of space leased and customised for SAMMAR Investments, a storage and distribution service dealing largely with SASOL products. Pockets 4A and 4C were being developed as a 48,000 sqm speculative facility when an approach from African Sugar logistics saw the rapid customisation of 34,000 sqm of this space in January 2021. The remainder of Pockets 4B and 4C, totalling 14,000 sqm, was recently leased to Super Group.

Fortress has also commenced the construction of smaller units on spec in response to market demand. Four mini warehouses of approximately 3,500 sqm each are due for completion in September 2021, Lewington said.

He added that Clairwood’s proximity to the port of Durban has uniquely impacted its evolution and innovation from a logistics perspective, especially its ability to handle containerised cargo.

The development of a 56,000 sqm container terminal within Clairwood for Kings Rest to be completed in September 2021 will extend the ability of King Rest’s existing container facility within the port of Durban.

Fortress’s advanced negotiations with Transnet to incorporate and develop an adjacent rail siding into the Clairwood complex will add an important rail capability to the hub. Having an on-site containerisation facility within Clairwood offering, potentially, dual road and rail capacity will provide “tenants a competitive edge when it comes to transhipment speed, price and reach anywhere in the country – or Southern Africa”.

Lewington said standard innovations that Fortress builds into most of its pockets include everything from higher eaves enabling more storage per square meter to high tolerance jointless floors. Independently pressured water supply and up to date fire suppression systems are also in demand. In addition, all roofing is built to accommodate solar panels for independent electricity supply.

“It is the co-location of so many capabilities, modalities, services, and options into a single location that makes state-of-the art logistics hubs like Clairwood so attractive to tenants.”

Lewington said Clairwood, today, represents the kind of growth that can be created by responding innovatively to client disruption, “understanding and supporting client businesses as they pivot to meet the challenges of ecommerce in a digital age demanding greater efficiency and flexibility in storage, transhipment, distribution and retail”.

He said the company’s vision and strategy to build a two-thirds logistics – and one third defensive rural retail – portfolio is an exact response to the transformation of logistics and retail in an age of ecommerce. “Clairwood represents this evolution in motion, leading the future of regional logistics and client growth.”

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