A new pilot scheme for the operation of small logistics centers in Tel Aviv has largely failed. Of five planned centers around the city, only two will start operating in the coming months, after three of the five companies that won the tender to operate them relinquished their wins. The main reason given was the economic situation in the country and the continuing war.
The tender for the operation of miniature logistics centers in Tel Aviv-Yafo was published in September 2022. Private companies were invited to bid to operate the centers - two of them in the Cinerama car park, two in the Reading car park, and one at the Dizengoff Center - with the aim of "raising the effectiveness of the distribution of goods around the city."
The companies were not required to pay for the use of the centers, but committed to bearing the ancillary costs of operating them, and to provide data to the municipality and to meet measures of efficiency. The centers are not meant for long-term storage, but as assembly points for goods, from which they will be delivered to customers by means of small, "green" vehicles such as motor scooters and electric bicycles. The centers are between 600 and 1,000 square meters in area, apart from the one in the Dizengoff Center, which was planned to be 90 square meters.
The tender was successful, and each of the five centers was one by a different company: DHL Israel and Orian each won one of the centers at the Cinerama; Buzz Express and Katz Fast Intercity Delivery each won one of the centers at Reading, and Cheetah Delivery won the center at the Dizengoff Center.
Subsequently, however, the companies started to say that they would find it difficult to operate the centers. The latest was Orian, which announced at the beginning of the year that it would not be able to open the center at the Cinerama, because of the war and the economic situation in Israel. The concessions of DHL and Cheetah were cancelled in August 2023. The reason given for their withdrawals was the deterioration in the economic situation in the country that had led to changes and downsizing in the companies and the freezing of new initiatives. At present, only the two logistics centers at Reading are expected to start operations, in the coming months.
The Tel Aviv Municipality stated in response: "The Tel Aviv Municipality published an innovative tender for the operation of logistics centers at several sites in the city. In the light of the situation in the economy and the circumstances that have arisen, three companies announced that they would forego the concession. The Municipality has signed contracts with the two remaining winning bidders. We are currently liaising with them on setting a date for operations to begin, with the aim that the logistics centers will start to operate at Reading shortly, barring circumstances that might prevent it. The decision on publishing a future tender will derive from the results of operating the logistics center at Reading and the conclusions from them, and from professional considerations."
Published by Globes, Israel business news - en.globes.co.il - on August 19, 2024.
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