Logicor has signed a new lease agreement with one of Hungary’s leading IT distribution companies for 5,580 sqm of warehouse space at Logicor Alligator Budaörs, bringing the property to 100% occupancy. Acquired by Logicor in December, 2025, the latest lease signed in quick succession demonstrates the strength of demand in the Budaörs area.

CHS, a nationwide IT distribution company headquartered in Budaörs, selected the facility to support its growing operations and expanding inventory. The proximity of Logicor Alligator to the company’s headquarters made the location particularly attractive, allowing it to increase its storage capacity while maintaining efficient logistics operations close to its main office.

The logistics park comprises approximately 28,000 sqm of warehouse and office space and is located within the M0 Budapest ring road, around 12 kilometres from Budapest city centre. The property benefits from excellent connectivity, with immediate access to the M1 motorway towards Western Europe, the M7 motorway towards the Croatian border, and the M0 ring road, making it ideally suited for both national and international distribution.

Domonkos Joó, Senior Director and Head of Hungary & Austria at Logicor, said:

“This transaction highlights the continued strong demand for well-located logistics space in the western Budapest submarket, despite a more competitive market environment, particularly amongst those focussed on efficient distribution operations. The fact that Logicor Alligator Park has reached full occupancy shortly the acquisition demonstrates both the attractiveness of the location and our customer-centric approach.”

The deal also reflects the evolving role of Budaörs, which has gradually transformed from a traditional industrial area into a mixed-use commercial and logistics hub as the city has expanded around it. Today, the area remains one of the most competitive logistics locations in Hungary due to its proximity to Budapest and its direct access to the country’s key motorway network.

Logicor has been active in Hungary for nearly a decade, managing a major part of its domestic portfolio in and around Budaörs. The company operates 172,000 sqm of space across eight parks located along Budapest’s main transport corridors, providing flexible and well connected facilities for domestic and regional distribution.

For businesses running delivery fleets, especially those managing multi-drop routes, route optimisation software is a necessity. Even for companies managing to get by with their current processes, with the rising pressures of fuel prices, amid global conflicts overseas, ongoing driver shortages and sustainability commitments, even the slightest change to the last-mile ecosystem can have a huge knock-on effect on a business’s bottom line. Therefore, it’s more important than ever to offset these challenges before they even occur by improving fleet efficiency.

Businesses that constantly aspire to improve route efficiency, increase delivery capacity and provide reliable service are better positioned to control costs more effectively while maintaining customer satisfaction. For this reason, organisations are increasingly turning to transport optimisation technology. Andrew Tavener (pictured, below), Head of Fleet Marketing EMEA, Descartes, explains how and where transport optimisation software can help businesses improve fleet performance.

1. Cost Savings from Smarter Planning
   With roads in the UK currently blighted by potholes, increasing vehicle wear and maintenance costs for fleet operators, transport efficiency has become even more critical. Add in fuel and labour costs, and things can start adding up very quickly. Fleet optimisation software can be the solution to this problem by helping plan routes that reduce miles driven, increase delivery density and require less time per delivery. Not only this, but this technology can also aid drivers in adhering to promised time windows and comply with drivers’ hours regulations.

The result is that businesses can reduce costs by cutting fuel spend, overtime, and maybe even the fleet size needed. Some strategic route planning systems even allow you to run “what-if” planning scenarios to explore how changing delivery time windows or fleet composition can impact costs, a valuable tool when you’re under pressure to do more with less.

2. Removing Guesswork
   Last-mile delivery is arguably one of the most important parts of the supply chain, especially for a customer. It’s also one of the most expensive for many operators, so there’s no room for guesswork. This means managers need to know if routes are being executed in line with the optimised plan. To do this, it’s essential to have optimisation technology that integrates with GPS and telematics solutions to offer real-time tracking and status updates. This way, managers are constantly in the loop. They know where a vehicle is, what it’s carrying and if it’s on schedule. This oversight empowers transport managers to respond to issues like delays or missed deliveries as they happen, not after the fact when they become a potential problem.
3. Greener Routes, Lower Emissions
   Route optimisation is also a critical sustainability tool. It allows businesses to reduce mileage, decrease vehicle idle time and reduce failed first-time deliveries. Some solutions even include carbon calculators and sustainability dashboards, allowing businesses to track their environmental impact. In 2026, many customers are now on the lookout for environmentally friendly delivery options and, by offering sustainable options, a business may stand out from the competition. Businesses can even incentivise customers with lower-priced deliveries if they choose “green” delivery windows at checkout.
4. AI and Predictive Analytics
   AI is now also playing a pivotal role in route optimisation. In this instance, it is helping businesses learn from operational data over time. For example, it assesses how long a drop usually takes at specific locations. Using AI and actual route execution data, businesses can produce more accurate routing plans than ever before. These capabilities also enable forecasting and exception handling. This means that if a certain area is prone to congestion on Friday afternoons, for example, the system can proactively reroute or adjust schedules to avoid delays.
5. Intelligent Depot Selection
   An underrated benefit of route optimisation technology is that it can help businesses select the best depot to dispatch deliveries from. An average system may factor in capacity, proximity and delivery demand. A great system helps a business decide where the journey should start by factoring in customer returns and collections or second visits to different depots. This is invaluable for businesses operating regional hubs or facing tight service level agreements (SLAs).
6. Seamless Integration with Existing Systems
   It’s important to remember that a good transport optimisation tool doesn’t work in isolation. It also must connect with your transport management system (TMS), enterprise resource planning (ERP) platform, warehouse management system (WMS), and/or driver mobile apps. The reason for this is to ensure fleet data flows smoothly throughout your operations. It also ensures minimal rekeying and an accurate view of fleet operations from planning to proof of delivery and even customer satisfaction surveys. The more connected your tech stack, the easier it is to scale, automate, and adapt to evolving future needs.
7. Increasing Operational Resilience
   Change in logistics is constant today; however, effective fleet optimisation software allows a business to stress test its operation by simulating different conditions and evaluating how its fleet performs. This kind of resilience planning helps a business be much more proactive in the face of challenges instead of reactive.
8. Happier Drivers and Customers
   When a solid plan is in place, drivers have a better experience behind the wheel. This means that route optimisation software can help alleviate driver stress, even at the busiest times of the year. This enables better driver retention for a business, which is a big internal benefit while, externally, customers also get the benefit of tighter delivery windows, better estimated time of arrival (ETA) accuracy, and more transparency.

With delivery networks more complex than ever before and customer expectations on the rise, proven and effective route optimisation technology is now crucial for any business looking to stay ahead of the curve. Not only can this technology enable better planning and execution, but it also enhances visibility. Ultimately, this gives businesses better control of fleet costs and the ability to meet sustainability targets while maintaining, if not improving, the quality of service. With more uncertainty ahead in 2026, this technology is no longer a nice-to-have; it’s a strategic priority.

Hitachi ZeroCarbon and GRIDSERVE have today published the fourth report from the Electric Freightway project, revealing that a single electric heavy goods vehicle (eHGV) could cut approximately 1,000 tonnes of carbon emissions by 2034, when compared with a diesel equivalent – an amount that would take 50,000 trees a year to absorb. The findings highlight the significant role electric trucks can play in decarbonising road freight, drawing on insights gathered from real-world operations across the UK.

The Electric Freightway project is part of the Zero Emission HGV and Infrastructure Demonstrator (ZEHID) programme, funded by the Department for Transport and delivered in partnership with Innovate UK. The project brings together more than 30 industry partners, led by GRIDSERVE, to accelerate the adoption of electric HGVs and the development of supporting charging infrastructure.

Moving through the gears

The fourth report highlights the progress made during the programme, with eHGVs now deployed across 25 hauliers and operating on real-world logistics routes across the UK. Participating fleets have collectively tracked over two million zero-emission kilometres, generating valuable insights into how electric trucks perform in day-to-day freight operations.

The report also explores the evolving business case for electric freight, showing that eHGVs can achieve cost parity – and potentially cost savings – in certain operating conditions, particularly where fleets operate high annual mileage and optimise charging between depot and en-route infrastructure.

Alongside these operational insights, the report also highlights growing driver confidence, with many reporting positive feedback on vehicle performance and drivability once they gain hands-on experience with electric trucks.

Commenting on their experience as part of the programme, Nick Day, Director of Distribution, UK at ADM Milling said: “As a business, we are constantly seeking more sustainable solutions to service our customers’ needs and have been exploring ways to improve energy efficiency and reduce GHG emissions in our manufacturing processes for many years now.

“Using electric trucks was the natural next step in this process and so we started engaging with a third-party haulier to introduce electric trucks and charging solutions into our fleet and then expanded this capability through the ZEHID scheme. While we still have more work to do to fully embed eHGVs within our operation, we are encouraged by the progress we’ve made so far and the ZEHID project has been a great opportunity for us to gain hands-on experience operating them.”

Meanwhile, Leon Clarke, Head of Operations and Delivery at Hitachi ZeroCarbon commented: “Electric Freightway demonstrates what can be achieved when industry partners come together with a shared ambition to decarbonise road freight. The collaboration between hauliers, infrastructure providers and technology specialists has been key to getting electric trucks on the road and generating real-world insights that will help the industry achieve its long-term net zero goals.”

With the initial deployment phase now complete and electric vehicles operating across multiple fleets, the Electric Freightway project will focus on collecting long-term operational data, refining charging strategies and continuing to support the transition to zero-emission freight transport.

Mike Biddle, Executive Director Net Zero at Innovate UK said: “Electric Freightway, led by GRIDSERVE in collaboration with principal partner Hitachi ZeroCarbon, has been instrumental in supporting the early efforts towards UK road freight decarbonisation, facilitated through the UK government’s Zero Emission HGV & Infrastructure Demonstrator (ZEHID) programme, delivered in partnership with Innovate UK. This report reflects on the project’s extensive findings as it moves beyond the earlier deployment efforts into large scale data collection in real world operations for the next five years.”

Insights from the project will help fleet operators, policymakers and industry stakeholders better understand how to scale eHGV adoption across the UK and build the right infrastructure to help transport and logistics achieve sustainable objectives.

Libiao Robotics, a pioneer in the warehouse automation sector, demonstrated its cutting-edge technology at the LogiMAT trade fair in Stuttgart. Alongside its acclaimed AirRob system, it showed its new AirRob PRO goods-to-person automated warehouse system to visitors.

AirRob is a high-density, high-efficiency warehouse automation system that uses coordinated vertical-climbing pick robots and floorbots to deliver goods rapidly to workstations, without requiring major infrastructure changes. Designed for intensive logistics operations, AirRob significantly increases storage capacity and throughput while reducing labour and energy costs, setting a high benchmark for scalable goods-to-person automation.

Widely deployed across multiple sites in Asia, AirRob by Libiao Robotics is now being specified in Europe at warehouses where labour availability is challenging and where high per-square-metre warehouse costs favour a compact, flexible and highly-efficient solution.

Visitors to Libiao Robotics’ booth will also get a chance to see at close quarters the new AirRob PRO automated system in action. AirRob PRO has been developed to offer fast, efficient and accurate handling of both original ‘raw’ cartons as well as totes, avoiding the time- and resource-consuming decanting of incoming/outgoing goods. Uniquely, the picking arm mounted on the AirRob climbing platform at the heart of the system pivots so that cartons and totes can be picked or dropped on both sides of the warehouse aisle, thus reducing the required number of workstations and in some cases eliminating them altogether.

Libiao’s local sales and technical support personnel were joined by representatives from the company’s senior management team in Stuttgart to greet visitors and demonstrate how its innovative solutions can help warehouse owners and operators make significant efficiency gains to operations where accuracy, reliability and flexibility are among the leading requirements.

Libiao’s Global Head of Sales Ronan Shen said: “Now that AirRob is becoming firmly established in Europe, and customers are seeing the significant benefits it brings, it is a perfect time for us to be at LogiMAT to talk with visitors about the many ways we can help them become more competitive. I’m particularly excited about demonstrating AirRob PRO, which has been developed in close consultation with customers with high-throughput operations who need to efficiently and accurately pick a mix of cartons and totes.”

Established in 2016, and celebrating its 10th anniversary later this year, Libiao Robotics has grown to become a leading player in the global warehouse robotics sector, boasting household name customers across Asia, Europe, Australia and South America, and familiar U.S. brands such as Skechers, Procter & Gamble (P&G) and K-mart.

Hugo Beck, manufacturer of horizontal film and paper packaging machines, will unveil a brand new machine solution at interpack Dusseldorf – the compact sleeve wrapper paper S for sustainable transport and secondary packaging in paper.

As the packaging industry continues to seek practical alternatives to plastic shrink film and excessive cardboard, the new paper S enables a tight kraft paper wrap with or without tray, providing a secure and resource-conscious transport packaging solution across a range of industries, including FMCG producers and retail-ready packaging operations.

The launch of the new sleeve wrapping solution further expands Hugo Beck’s portfolio of sustainable paper packaging technologies – now with a focus on transport packaging applications. This reflects the company’s ongoing commitment to developing machine concepts that support reduced material consumption without compromising product and transport safety or operational efficiency.

The paper S has been developed as a compact operator and maintenance friendly sleeve wrapping system that can be installed inline within existing production lines or operated as a standalone solution. Its space-saving design makes it suitable for facilities with limited floor space.

The machine wraps products in or without a tray in kraft paper with overlap and optimised hot-melt gluing to ensure a tight and stable pack. This creates bundles for secure transport and handling, helping manufacturers transition away from shrink film or cardboard systems while maintaining product stability throughout the supply chain.

In addition to cost savings on material, the paper S enables energy savings compared to heat-based shrink wrapping processes. Optional add-ons such as digital printing units, labelling systems or additional automation components can be integrated to tailor the machine to specific customer requirements.

The paper packaging solution has been developed in close collaboration with Mondi to ensure reliable processing and a well-matched interaction between paper substrate and machine technology. Therefore, the new sleeve wrapper will be running with Mondi’s Ad/Vantage StretchWrap paper of only 70 gsm on the Hugo Beck stand.

Combined with its very low weight, this uncoated kraft paper offers high puncture resistance and stretch characteristics, which lead to an exceptional tensile energy absorption, while being industrially compostable and recyclable in conventional paper streams.

Visitors to interpack are invited to see live demonstrations of the new sleeve wrapper on the stand and discuss with the experts on site the company’s comprehensive machine portfolio for sustainable film and paper packaging.

“This introduction of the paper S in close collaboration with Mondi as a holistic solution represents a logical next step in our sustainable packaging strategy,” said Jonas Beck, Managing Director at Hugo Beck.

“It builds on our continuous development of paper packaging technologies over recent years. Following the launch of the paper X series targeting multiple industries together with dedicated ecommerce packaging solutions, we have steadily expanded our sustainable offering alongside our established film-based solutions. Our aim is always to support our clients to meet evolving market and regulatory demands in terms of increased sustainability. With the paper S sleeve wrapper we are offering a practical solution for reducing plastic usage and minimising cardboard consumption in transport packaging while maintaining the reliability and performance our clients expect from our technology.“

As LogiMAT 2026 enters its final day at Messe Stuttgart, the first two days have highlighted a sector focused on making automation more practical, flexible and financially accessible.

Across the exhibition halls, the dominant theme has been a shift away from large, capital-heavy projects towards scalable solutions that can be deployed in stages. Exhibitors are responding to tighter budgets and economic uncertainty by prioritising faster return on investment, without slowing the pace of innovation.

More than 100 product launches have been showcased so far, with a clear emphasis on refinement rather than disruption. Many of the new systems focus on improving efficiency, usability and integration within existing operations, reflecting a maturing market where incremental gains are delivering measurable value.

Artificial intelligence is central to much of what is on display, particularly in combination with machine vision and advanced sensor technologies. From vision-guided robotics to real-time inspection tools, these systems are enabling higher levels of automation while reducing the need for manual intervention. The growing importance of data capture and interpretation is becoming as critical as the physical movement of goods.

Robotics continues to attract strong attention, but the focus has shifted towards flexible, mobile solutions that can be deployed quickly and adapted to different environments. This is opening the door to wider adoption, particularly among smaller operations looking for lower-risk entry points into automation.

Integration is another key trend, with suppliers demonstrating how forklifts, robots and warehouse software can operate within connected ecosystems. The ability to synchronise manual and automated processes in real time is becoming a defining feature of next-generation intralogistics.

Alongside technology, there is a continued emphasis on supporting the workforce. Ergonomic tools, wearables and assistive systems are designed to enhance productivity and safety, underlining the ongoing role of human operators in increasingly automated environments.

With one day remaining, the direction of travel is already clear. LogiMAT 2026 is showcasing an industry that is balancing innovation with realism, focusing on solutions that are not only advanced, but also adaptable, scalable and economically viable.

Come and visit us at stand 6A06 to discuss the latest trends shaping the intralogistics sector and share your insights with our editorial team. If you miss us at LogiMAT, you’ll also find us at MODEX Atlanta in a couple of weeks at stand BL2-27.

CtrlChain, a transportation management company specialised in road freight across Europe and the US, is strengthening its logistics services with a new pallet transport service. With the Netherlands as a central hub, businesses can now ship pallets across Europe and beyond or receive goods through the same reliable network.

Efficient and Scalable Shipping

The service is designed for businesses of all sizes. It offers clear and trustworthy options from any load, from standard euro pallets to industrial and half pallets. The service scales to meet specific needs, providing both Less than Truckload (LTL) and Full Truckload (FTL) capacity.

To ensure financial transparency, CtrlChain’s digital pallet calculator provides instant pricing by just entering pickup details, dimensions, and weight. Businesses receive an accurate quote before moving forward with the booking. see this pallet calculator here.

Oversight and Specialized Handling

Booking is fully integrated into the CtrlChain system. Customers can schedule shipments with complete oversight from start to finish, working with certified carriers and specialised transport options including:

• Timeslot deliveries: Precise scheduling to meet strict arrival windows.
• ADR shipments: Safe transport for hazardous materials in full compliance with regulations.
• High-care handling for sensitive goods: Enhanced protection for sensitive goods.

Although pallets are often less visible than other types of shipments, CtrlChain ensures they are monitored with the same reliability and attention as dedicated transport. This approach eliminates hidden fees and provides predictable, dependable delivery.

“Shipping a few pallets should not feel like a different job than shipping a full truckload. We integrated LTL and Pallet Service into CtrlChain system because our customers deserve the same ease and reliability regardless of what they are moving,” says Giovanni Gubbels, CEO at CtrlChain.

Ruud Broekhuizen, Senior Manager Transportation EMEA at Imgram Micro Netherlands, adds, “working with CtrlChain gives us peace of mind. Their pallet service is easy to use, transparent, and backed by their support team. It is exactly what businesses need for reliable transport.”

India’s logistics sector is at a decisive inflection point, with automation rapidly reshaping the way goods are stored, handled, and transported, writes Khursheed Alam (pictured, below), Founder, Atmos Systems.

What was once a fragmented, labour-intensive ecosystem is now evolving into a more integrated, technology-driven network. This shift is being driven by rising demand for speed, precision, and scalability in a consumption-led economy. Automation is no longer a future ambition it is becoming central to operational strategy, enabling logistics players to enhance efficiency while responding to increasingly complex supply chain requirements.

A key manifestation of this transformation is the rise of automated warehousing. Advanced systems such as robotics, automated storage and retrieval systems (AS/RS), and AI-led inventory management are redefining warehouse operations. These technologies are significantly improving picking accuracy, reducing turn around times, and optimizing space utilization critical advantages in a market where real estate costs are steadily increasing. More importantly, automation is enabling consistent, high-volume throughput, allowing companies to scale operations without a proportional increase in manpower.

Beyond warehousing, intelligent automation is streamlining end-to-end logistics operations. Technologies such as Autonomous Mobile Robots (AMRs) and drone-enabled inventory tracking are minimizing human intervention, reducing errors, and enabling round-the-clock operations. This transition is not merely about cost efficiency; it is about building resilience, agility, and reliability into supply chains. As India positions itself as a global manufacturing and consumption hub, automation will play a defining role in creating a logistics ecosystem that is faster, smarter, and globally competitive.

E-commerce: Catalysing Tech Revolution of India’s Logistics

The explosive growth of e-commerce is perhaps the single largest driver of this technological pivot. As platforms like Amazon, Flipkart, and quick-commerce disruptors like Zepto and Blinkit redefine consumer expectations, the ‘need for speed’ has become absolute. The Indian warehouse automation market is witnessing a massive surge as players race to trim minutes off their delivery timelines.

To handle millions of stock-keeping units (SKUs) and ensure ‘same-day’ or ‘ten-minute’ deliveries, logistics providers are investing heavily in automated sortation systems and AI-driven demand forecasting. Automation allows these companies to handle seasonal spikes, such as during festive sales, without the logistical nightmare of massive, temporary manual hiring. In this hyper-competitive landscape, the efficiency of a company’s automated backend is directly linked to its customer retention rate.

Building Smart Infrastructure

The transformation is not limited to private enterprises; it is being etched into the very geography of the country. India is seeing the birth of ‘Smart Logistics Parks’, designed to be hubs of interconnected technology. A landmark example is the development of the country’s first smart logistics park in Nagpur by XSIO.

These parks integrate Internet of Things (IoT) sensors, GPS tracking, and automated gate management to create a seamless flow of goods. By situating these high-tech hubs at strategic multimodal locations, India is reducing the logistics cost as a percentage of GDP, which has erstwhile been higher than in developed nations. These smart clusters ensure that once a package is sent out from an automated warehouse, it stays within a digitally tracked, high-efficiency ecosystem until it reaches the end consumer.

A Future-Ready Supply Chain

The integration of robotics, AI, and smart infrastructure is doing more than just moving boxes faster; it is providing end-to-end supply chain visibility. For businesses, this means better data, fewer losses, and leaner operations. For the Indian economy, it signals a transition from a labour-intensive sector to a technology-driven powerhouse.

As automation continues to mature, the challenges of the ‘last mile’ will diminish, and the reliability of Indian exports will rise. By modernising its logistics domain through automation, India is not just catching up with global standards but is building a future-ready infrastructure capable of supporting the world’s fastest-growing economy. The shift from manual to mechanical is well underway, ensuring that the future of Indian logistics is fast, fluid, and flawlessly automated.

Designed to automate a wide range of warehouse operational flows, Swarm Automation Transport is a multifaceted automation solution that seamlessly integrates into mixed fleets, simplifying processes, reducing errors and protecting goods from damage. With its latest solution, Toyota Material Handling Europe offers a reliable and scalable automated warehouse transport system that can handle multiple pallet types and facilitates standard and turned pallet loading at low to mid-lift height.

Dynamic, scalable solution for modern warehouse automation

Toyota Material Handling Europe’s automated warehouse transport system combines the Toyota SAI125CB Automated Counterbalance Stacker with T-ONE Control System, intelligent automation software. Swarm Automation Transport easily fits into any major warehouse flow, supporting various warehouse activities and seamlessly integrates into any complex warehouse environment. This holistic solution is particularly valuable for businesses handling multiple pallet types, like euro pallets or bottom-deck pallets, or requiring specific handling procedures such as turned pallet loading.

In support of warehouse efficiency, this new dynamic solution can be deployed for fully automated performance, engineered to operate in sync with other AGVs including Toyota’s automated reach trucks. For businesses combining automation with manual handling, the system supports a hybrid, semi-automated functionality, optimising productivity through effortless coordination with conventional warehouse trucks.

This solution is perfectly suited to a wide range of industries, including warehouse logistics, industrial production and manufacturing, retail distribution and fast-moving consumer goods (FMCG), food retail, as well as other dynamic sectors such as parcel delivery, airport operations and e-commerce.

Transport and storage for conventional racking

Swarm Automation Transport offers a practical and cost-effective solution for businesses looking to start their automation journey. Ideal for stacking near conveyors or cells, this solution can also benefit existing automation users who aim to maximise their ROI, as it integrates easily with different fleet types. Pallet storage can be done up to 5 m in height, with a maximum of 12 m when paired with other Toyota automated reach trucks.

“Swarm Automation Transport marks a major step in our mission to make automation accessible to every warehouse,” says José Maria Gener, Vice President Sales & Marketing at Toyota Material Handling Europe, “By combining the strength of our automated counterbalanced stacker with the intelligence of our automation software T-ONE, we’re giving customers a scalable solution that elevates safety, efficiency and performance across their entire operation.”

Further reinforcing its commitment to responsible design, Toyota Material Handling equips its latest solution with high-efficiency lithium-ion batteries and automatic charging capabilities. The result is reduced overall energy consumption, smooth recharging and longer usage cycles. The 360° Personal Protection System integrates sensors, scanners and bumpers for an overall safer experience.

Automation at every level

Swarm Automation Transport is highly beneficial for generating streamlined fully automated and semi-automated workflows. It is also perfect for managing repetitive transport tasks, pallet handling in buffer areas and for optimising replenishment processes.

Their latest automated solution represents Toyota Material Handling Europe’s continued commitment to developing technologies that elevate safety, efficiency and scalability across every layer of the supply chain.

Industrial and logistics development has proved one of the most resilient segments of the property market, write Mark Macaulay and Tasmyn Brittlebank, construction partners in the Projects practice at law firm Dentons.

Demand for warehouse and distribution space, driven by ecommerce growth, supply chain restructuring and the expansion of last-mile delivery networks, continues to support new logistics parks across the UK. Yet the construction environment behind these developments has become increasingly complicated.

Logistics projects are frequently delivered on brownfield land, rely heavily on steel-intensive construction and often require substantial off-site infrastructure works.

As global supply chains remain volatile, with recent geopolitical tensions, including the conflict in Iran, affecting energy markets and shipping routes, these are contributing to renewed inflationary pressure on the cost of construction materials.

For developers and contractors, the challenge is no longer simply delivering warehouse space, but managing the legal risks associated with ground conditions, supply chain volatility and infrastructure obligations.

Ground risk and contaminated land

Many logistics developments are located on former industrial or manufacturing sites. While brownfield land can offer planning advantages, it often presents complex ground conditions and contamination risks that affect construction delivery.

Under the Environmental Protection Act 1990, local authorities have powers to require remediation of contaminated land where it presents a risk to human health or the environment. Where the original polluter cannot be identified, liability may ultimately fall on current landowners or occupiers.

From a construction law perspective, these risks frequently emerge during early site works. Even where Phase I and Phase II environmental investigations have been undertaken, unknown contamination or unstable ground conditions can still arise once excavation begins. The key legal question is how that risk is allocated under the construction contract.

Under some contracts ground risk generally remains with the employer unless expressly transferred. Alternative NEC Engineering and Construction Contracts address unexpected physical conditions through compensation event mechanisms that allow cost and programme adjustments where conditions differ materially from those anticipated.

English case law also underlines the importance of contractual risk allocation where site conditions are concerned, and the Court of Appeal has confirmed contractors cannot rely on unforeseen ground conditions where the contract places responsibility for investigating site conditions on them.

For large logistics schemes involving extensive earthworks or remediation works, the treatment of ground conditions within the building contract can therefore have a significant impact on both programme certainty and project cost.

Inflation, steel and supply chains

Modern distribution facilities depend heavily on structural steel frames, cladding systems and mechanical installations, meaning logistics developments are particularly sensitive to supply chain volatility.

Recent geopolitical instability has reinforced that exposure. The Iran conflict has raised concerns about disruption to global shipping routes and energy markets, increasing freight costs and placed upward pressure on construction materials such as steel.

For developers procuring logistics schemes, the question quickly becomes one of contractual risk allocation, particularly who carries the risk of inflation. Traditional procurement models rely on fixed-price construction contracts that place cost escalation risk on contractors. However, sustained material price volatility has made contractors increasingly reluctant to absorb open-ended price exposure.

Standard form contracts offer different responses. JCT contracts include optional fluctuation provisions, although these are frequently excluded in commercial developments, while NEC contracts, particularly under target cost arrangements, allow greater flexibility in managing cost change.

Supply chain disruption can also translate directly into programme delay. Shortages of structural components, façade systems or mechanical plant may trigger extension of time claims and threaten completion dates — particularly problematic where logistics developments are pre-let to tenants with fixed operational timelines.

Again, English case law also illustrates the importance of clear contractual drafting in allocating delay risk, and the Court of Appeal has confirmed parties are free to allocate responsibility for delay through their contract, even where doing so alters the traditional operation of the prevention principle (the rule that a party cannot insist on contractual completion dates where its own actions have caused delay).

Highways and infrastructure interfaces

The high traffic volumes generated by distribution facilities, particularly heavy goods vehicle movements, often require mitigation works to surrounding transport infrastructure. These works are commonly delivered through Section 278 agreements under the Highways Act 1980, allowing developers to fund and construct works to the public highway.

Under Section 278 agreements, highway authorities must approve detailed designs and supervise works carried out within the highway network. Where access roads or junction improvements are linked to project completion, delays in highway approvals or construction can affect programme certainty and practical completion.

For large logistics parks, where vehicle access is central to operational viability, misalignment between highways obligations and construction programmes can create significant delivery risk.