L. Kuzavas: AI Is Reshaping Logistics Chains

Over the past five years, businesses have experienced it all: from the Taiwan semiconductor crisis to disruptions in Russian supply chains and the energy price shock in Europe. Logistics is evolving, and today, advanced real estate developers are no longer observers—they actively shape environments that enable businesses to grow faster than the market.

Supply chain shortening (nearshoring), fluctuating energy costs, and AI solutions are reshaping both business thinking and attitudes toward warehousing. Geopolitical developments have revealed that what was long considered “efficiency” has now become “risk.” And what used to be “just a warehouse” is now turning into a strategic decision-making hub for every business.

As SIRIN Development’s experience in the Baltic states demonstrates, logistics real estate is undergoing transformation. This shift is accelerating—from passive assets to active infrastructure, ecosystems, and platforms. Moreover, Lithuania, Latvia, and Estonia are advancing faster in this area than experts had anticipated.

1. Supply Chains: From Efficiency to Resilience

The key market shift is clear: production and inventory are moving closer to the end consumer. The pandemic already forced manufacturers to relocate production from Asia back to Europe, but the Taiwan semiconductor crisis proved that a single geopolitical factor can halt entire industries. Russia’s removal from supply chains further highlighted the speed of change. Events in the Strait of Hormuz have demonstrated a new dynamic—market conditions can shift not in days, but in hours.

What does this mean for businesses? The European warehousing market is estimated at approximately EUR 345 billion, with projections suggesting growth to EUR 610 billion within a decade—an increase of about 1.5 times. This is not a cycle, but a structural transformation creating significant opportunities for the Baltic region. Industries such as timber and light manufacturing continue to grow even in severe кризі conditions, making cost efficiency and speed of delivery critical to survival.

Additionally, the war in Ukraine has driven up labor costs across Europe. As a result, having production and storage facilities closer to home provides tangible advantages. In some cases, facilities in neighboring countries can become a lifeline, as modern production equipment can now be relocated very quickly.

2. Energy: A New Limiting Factor

Historically, business expansion was constrained by land and capital. Today, the key question clients ask is simple: do you have sufficient electricity capacity? In many European regions (including the Baltics), power grids are already operating near their limits, making energy a real bottleneck for growth. Location alone is no longer enough—the winners are those with ready-to-use infrastructure: electricity, water, access, and construction permits. Investors now prioritize speed-to-operation over geography.

What does this mean for companies? In some sectors, energy accounts for 20–30% of total production costs. Therefore, decisions cannot be based solely on initial price. The cheapest option upfront can become the most expensive if it limits long-term energy cost control.

A++ class buildings and smart systems can reduce energy consumption by up to 30%, directly lowering risk and improving financing conditions. ESG is also changing its meaning—it is no longer just about “green solutions,” but about managing costs, risks, and access to capital.

And sustainability today also includes working conditions. Modern, well-lit, ergonomic spaces reduce errors, increase productivity, and become a real driver of efficiency—not just a reputational factor.

3. Warehouses: From Space to Automated Systems

To be blunt, the biggest mistake in 2026 is evaluating warehouses based on price per square meter. Why? Because it says nothing about quality.

Today, what matters is volume, efficiency, and management. Advanced developers are moving from 8–10 m to a 12 m standard height, allowing clients to generate up to 20% more usable volume from the same footprint.

What does this mean for the market? Modern high-bay warehouses in Europe are reaching heights of up to 40 m. As labor becomes more expensive and less available, technology is no longer optional—it is essential. Automated warehouses must be spacious and easily maintained by both robots and human workers. The era of robotics in warehousing has already begun.

This is already happening in practice. For example, Sakalas has implemented robotic storage systems in the Liepkalnis logistics park, improving flow management and attracting attention from U.S. clients. Such solutions require suitable physical infrastructure: ultra-flat floors, high buildings, and precisely designed layouts that allow automation to be integrated without additional costs. For clients, this is not innovation for its own sake—it is a direct response to labor shortages and efficiency pressures.

4. AI as a Decision-Making System

Logistics facilities are increasingly becoming data management platforms. Building management systems, energy monitoring, and microclimate control ensure operational transparency that directly impacts profitability. Up to 40% of warehousing demand in Europe is driven by e-commerce, meaning warehouses are no longer storage sites—they are distribution hubs that influence sales and customer experience.

The greatest transformation is happening in decision-making. Around 75% of logistics companies use digital platforms, while automation is growing more than twice as fast. AI is reshaping both processes and decision logic—it enables the creation of new supply chain models, simulation of scenarios (price spikes, disruptions), and real-time demand and price forecasting.

In practice, we already see this in our own projects. We apply AI to optimize costs, enabling our clients to manage energy, transport, and inventory expenses more accurately in real time. We are also witnessing rapid growth in AI adoption in inventory management.

What Mistakes to Avoid in 2026?

Experts in London, Riga, and Berlin agree: the biggest mistake is waiting for stability. The focus should be on building systems that function in unstable environments.

Shorten supply chains: move critical processes closer to the market and reduce reliance on a single region
Invest in efficient infrastructure: energy and efficiency are becoming key competitive advantages
Implement AI logistics solutions: not experimentation, but practical application where it delivers direct financial impact

Logistics is no longer a background function—it has become a strategic layer of business. That is why clients increasingly choose not just premises, but long-term partners—developers who remain operators and ensure infrastructure quality throughout the entire lifecycle of the asset.

Ultimately, winners will not be those with the best location, but those with operational infrastructure—systems that reduce costs and decision-making models that enable faster action than the market.