The rapid expansion of data center infrastructure is creating demand for all sorts of logistics and transportation services including parcel. Driven by artificial intelligence, cloud computing and high-performance computing, data center construction is accelerating the movement of servers, networking equipment, storage systems, replacement parts and other technology components.
Property management firm, JLL, estimates that nearly 100 gigawatts of new data center capacity will be added globally between 2026 and 2030 and projects demand for data centers will grow at a 14% compound annual rate through 2030.
Data centers require thousands of individual components, many of which must move quickly from manufacturers and distributors to construction sites or operating facilities. Once a facility is operational, ongoing demand is generated by equipment upgrades, maintenance, repairs and replacement parts.
S&P Global estimates that every gigawatt of U.S. data center expansion requires approximately 100,000 truckloads, illustrating the broader transportation intensity of the sector.
Traditional parcel carriers remain important, but data center customers increasingly require specialized logistics capabilities rather than basic pickup-and-delivery services. Security, chain of custody, precise delivery appointments, inside delivery, inventory visibility and rapid replacement capabilities can be just as important as transportation cost.
“What differentiates FedEx here is our unmatched responsiveness and our premium capabilities leveraging network priority, near real-time monitoring, and white glove handling,” FedEx’s Chief Customer Officer, Brie Carere, told analysts in June.
Additionally, DHL recently expanded its data center service logistics network to more than 150 locations across the U.S. and Canada, enabling critical parts to reach customers within four hours.
What does this mean for you?
Data Centers require specialized value-added services. Does your parcel needs also require value-added services? If so, weigh your options carefully – costs, references and geographic reach are some of the things to keep in mind.
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Why am I telling you this?
I’m Jay Kent, CEO/Founder of SLB Performance, a business advisory group that helps companies, like yours, reduce supply chain costs, implement BI tools, improve in-stocks and customer service.
After 25 years of leading some of the most complex supply chains in the industry, I began advising companies in multiple industries and verticals.
Twice a month, I’ll also share relevant small parcel and supply chain news.
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Look for the next Jay’s Parcel Notes, a twice a month LinkedIn newsletter for additional news and thoughts.
Jay Kent