From scooters to sustainability- what does the logistics market look like in Sweden?

The demand for warehouse space in Sweden has been on the rise during the Covid-19 pandemic and continues to increase. The reasons for this trend are several, but the disruptions in global shipping and increased costs attributable to shipping in combination with many brick-and-mortar stores transitioning to e-commerce have been key factors. Nowadays, the concept of “just in case” seems to be more prioritised than “just in time” and the large number of ongoing warehouse construction projects in Sweden speaks for itself.

Another driving factor for the shift in supply chains in Sweden is sustainability. The Covid-19 pandemic has contributed to a higher level of general awareness in regard to where products are manufactured and shipped from. Consequently, private actors and end customers have started prioritising products and services which are more justifiable both from an environmental and ethical perspective. During 2021 and the beginning of 2022, we have seen large Swedish industry corporations choosing to locate their production in Sweden, which most likely would have been outsourced abroad if it were not for the lessons learned from the Covid-19 pandemic. The insourcing trend in Sweden has also become even stronger in light of the Russian invasion of Ukraine and the associated impacts on energy cost, transportation time etc.

As a result of this insourcing trend in Sweden we have found that our clients are increasingly seeking advice on warehouse and distribution agreements, rules regarding e-commerce and sustainability. It will be interesting to see what the future holds, but it seems that the shift in supply chains that we are now experiencing is here to stay.

Moving on from the built environment to transport, it seems that change is still the order of the day. Electric scooters have become a common form of transportation in the urban environments of Sweden and their introduction to the market has given rise to many interesting questions about how they fit into the existing structures of public life. Many of those questions are legal ones. There is currently no legislation in Sweden explicitly regulating electric scooters and each city has developed its own approach on how to ensure that the electric scooters do not endanger road safety and public order.

During late 2021, the city of Stockholm was in the limelight for its decision to impose a requirement for police permit to rent out electric scooters, to charge fees from the companies renting out electric scooters and to limit the number of electric scooters available for rental in Stockholm from 23,000 to 12,000.

In connection with the decision, the city of Stockholm also articulated that only three of the current eight companies renting out electric scooters in Stockholm would be granted a police permit and that the permit would be granted on informal criteria (such as how well the companies had run its rental business historically). Needless to say, the decision was heavily criticised by the electric scooter rental companies and a majority of the electric scooter rental companies appealed the decision to the administrative courts of Stockholm.

The city of Stockholm defended its decision by saying that the electric scooters created disorder and posed a safety risk. Even if the electric scooter rental companies agreed with the city of Stockholm in principle, they argued that the city of Stockholm had made the decision without legal basis and that the decision side stepped the mandatory rules on public procurement. As a reaction to the appeal, the city of Stockholm changed is position and communicated that all current electric scooter rental companies in Stockholm would be granted police permits and that the allowed number of electric scooters available for rental in Stockholm would be divided equally between the companies.

The city of Stockholm has since announced its ambition to carry out a public procurement regarding the electric scooters in autumn 2022 but until then, and unless the administrative courts of Stockholm come to another conclusion regarding the decision, the scooter rental business in Stockholm remains subject to several restrictions. We are closely following the developments in the field of micro-mobility in Sweden and guide our clients on this subject matter on a daily basis.