Proximity Matters: Synergies Through Co-Location of Logistics Establishments

Although anecdotic evidence suggests that co-location of logistics activities can bring several benefits to the co-located logistics companies and hence, can be important to incorporate in the location decisions of these companies, this is the first paper to empirically research these benefits. This paper contributes to the understanding of spatial concentration of logistics firms by empirically analyzing synergies through co-location and investigates whether spatial concentration of logistics activities indeed results in classical agglomeration economies as well as benefits, which are specific for the logistics sector. Hypotheses related to synergies through co-location of logistics activities are tested based on a survey among managers of 507 logistics establishments in the South of the Netherlands. The findings show that co-located logistics firms more often combine transport and storage capacity, are better accessible, have better availability of repair and maintenance facilities, and have better expansion opportunities than non-co-located logistics firms do. As this research shows that synergies through co-location of logistics activities indeed exist, manager of logistics companies may need to take these benefits into account in location decisions, academics in facility location models, and policy makers in spatial planning.