April 26, 2018

Densely populated and digitally connected megacities will create an urgent demand for inner-city, hyperlocal fulfillment centers says Dr. Matthias Winkenbach, Director of the MIT Megacity Logistics Lab.

Winkenbach’s analysis is part of a new white paper titled Roadmap for Change: The Flexible Industrial Distribution Facilities Network of the Future published by the Industrial Asset Management Council (IAMC).

The changing dynamic between manufacturer and customer is disrupting the distribution function. The white paper describes a number of these disruptors.

People migrating to cities is one. The baby boomer generation wants urban-style living in urban centers that offer services such as mass transit systems. This movement of people is expected to create megalopolises. In developing countries both the number and size of megacities – cities with more than 9 million inhabitants – are on the increase.

The World Economic Forum estimates that urban populations will increase from 4 billion to nearly 7 billion over the next 30 years.

These urban populations could generate much of the world’s economic activity. Winkenbach estimates that in the future, two-thirds of global economic growth will come out of only 600 massive megacities.

The outlines of the sprawling conurbations of the future are emerging. An example is the BosWash megalopolis in the US, the corridor between Boston and Washington DC, which is currently responsible for about 20% of US GDP, estimates IAMC. By 2050, this mega-region will likely be home to nearly 71 million people, almost 18% of the US population.

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