The exponential growth of tech and e-commerce industries has seen a dramatic change in warehouse construction trends over the last five to ten years. When Covid-19 took hold and online shopping soared even further, it placed even more pressure on warehouses to keep up with this evolution.
Unlike many sectors, the warehousing industry has been booming in the face of Covid-19. The online shopping habits of modern consumers and millennials has forced a significant change to the landscape of warehouse construction over recent years, and never more so than in the wake of pandemic conditions that have forced consumers the world over to shop from home.
Warehouses are now considered to be logistical hubs that are finely tuned designs, constructed to ensure that every branch of a supply chain’s efficiency is maximized.
Here are some of the key areas that have dramatically evolved in recent years.Growing warehouse footprints
Warehouse spaces used to rarely be more than small facilities dedicated only to shipping and receiving, but now they are fast transforming into almost fully automated, high tech processing centres. According to Dodge Data and Analytics, total warehouse construction starts rose from 49 millions square feet to 283 million square feet between 2010 and 2018.
One of the largest contributors to this colossal growth is global giant Amazon, operating approximately 250 million square feet of distribution warehousing real estate. The Amazon warehousing network includes six unique building configurations of differing sizes averaging between 600,000 and over one million square feet. Amazon is certainly paving the way for the importance of size when it comes to the bottom line.
Relocations from rural areas
It was once thought that rural areas were the best spots for warehouses, without the complicated infrastructure or population density that can make it difficult for trucks and trailers to navigate. These days, millennials are demanding faster shipping that is more direct-to-consumer, and it’s this demographic that represents the largest driver of growth when it comes to the e-commerce boom.
Major cities the world over have been experiencing increasing demand for smaller warehouses with footprints that spread upwards more than outwards. This is particularly helpful for the trend of last-minute fulfillment, a sector that has grown steadily with the modern expectations of lightning-fast shipping and same-day delivery services. Such facilities are often renovations of existing spaces as opposed to new builds.
President of SJF Machine Handling Inc., Stafford Starner, says that these multi story warehouses for last-minute fulfillment shipping have consolidated the future for industrial development as a primarily vertical trajectory.“The boom in e-commerce has resulted in an ever-increasing demand for industrial facilities to be located in urban areas, forcing the evolving sector to look to multi-story developments instead of the traditional, spread out one-level designs of days gone by.”
As the world of e-commerce continues to drive the need for more industry employees, the requirement to remain competitive as an attractive employer grows with it, making warehouse amenities more important than ever. Modern and comfortable employee amenities such as fully built-out, granite countertop kitchens, lounge areas with flat screen TV’s, fresh food vending machines and dining areas are fast becoming the expectation.
Despite many predictions that automation would significantly decrease the warehouse workforce, many companies continue to experience the opposite. Many retailers are boxing everything individually and sometimes bringing hundreds of people in every day to fulfill packaging requirements for shipping. This, in turn, has increased the need for parking spaces, with some facilities hosting as many as 1,500 vehicle spaces.
>In more temperate climates, some facilities have even landscaped allocated outdoor areas for employee use. Warehouses with well-equipped employee facilities are best primed for attracting and retaining workers.
Cold storage is red hot
According to CBRE data, up to 100 million additional square feet of cold storage space within warehousing will be required to meet the growing demand for online meal kits and grocery delivery sales over the next five years. It is predicted that food is going to become the next significant disrupter for the industry.
Perishables, however, require specialized handling and protecting food in transit can be tricky. Maintaining the cold supply chain from the warehouse to the customer’s front door can be a difficult and costly exercise. Industrial buildings that are food-equipped can cost up to four or five times more than traditional warehouse buildings. Strong roofing for supporting heavy-duty cooling units and floors that can maintain below ground cooling systems are just some of the considerations.
Nevertheless, the online trends predicting an increased need for cold storage facilities will result in an expansion of this sector that will force any serious contenders to invest in the necessary infrastructure to compete with the big guns.
The warehousing industry has certainly experienced seismic changes in recent years and the competition to keep up with both technological and logistical trends has been fierce, and largely solved by adaptations to warehouse design and construction.