Choose a logistics center location using data, not just land prices

A large, flat, reasonably priced plot can look very attractive on a map. But a logistics center earns money from the cargo flowing through it, not from empty land. A wrong location usually cannot be fixed with a nicer warehouse or more expensive equipment. Site selection should therefore be treated as a data and network problem.

1. Cargo sources: who will use the center, and will they use it year-round or seasonally?

Map the industrial parks, production clusters, border gates, agricultural areas and consumer markets; then break cargo down by sector, transport mode and season. Investment registration figures only show potential. A site decision also needs actual output, routes already in operation and the ability to shift cargo to the new center.

2. Multimodal connectivity: measure transit times and bottlenecks, not just kilometers

Two sites that are both 60 km from the port can have very different costs if one route passes through an urban area, has truck-hour restrictions or is frequently congested. For rail and inland waterways, check the connection point, handling capacity, operating schedule and the first- and last-mile road legs. Connectivity only has value when it creates a journey that can actually be operated.

3. Ability to balance flows in both directions

A corridor with heavy exports but few imports easily generates empty runs and empty-container repositioning costs. The site map should show both outbound and return flows, container types, peak seasons and customers who can pool loads. This is the difference between a site that is merely near the cargo source and one that genuinely reduces logistics costs.

4. Service radius must be tied to committed transit times

A radius of 50 or 100 km is meaningless if separated from delivery time. For high-value industrial goods, refrigerated cargo or air cargo, reliability and cut-off times can matter more than a few percent of the rent. Convert each customer group into a service-time threshold first, and only then narrow down the site search area.

5. Technical infrastructure and scalability

Electricity, water, drainage, fire protection, ground conditions, site levels, road connection points and protection corridors can create very large hidden costs. Compare not only the available area but also the shape of the plot, the potential for phasing and the infrastructure that can be shared across phases.

6. Legal status and planning compliance

A site that is good operationally but does not conform to the master plan, or has an unclear path to land-use conversion, will prolong preparation. The site matrix should treat legal risk as a separate criterion, listing documents already in hand, documents still missing and the authorities to be engaged.

Location scoring sheet template

You can start with six groups: cargo sources 25%, connectivity 20%, two-way balance 15%, technical infrastructure 15%, legal status 15% and expandability 10%. These weights are only a starting point; air cargo projects, cold storage, ICDs or distribution centers must adjust them to their revenue model. Most important is to define the scoring method and data sources before knowing which site is leading.

Deliverables expected after a site study

A good report does not simply choose A over B. It must show which site suits which cargo segment, the feasible capacity, the conditions to be met, the risks to be addressed and the milestones that would trigger a review of the decision. The results can then feed directly into the planning brief and the investment report.

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