It almost goes without saying: Warehouses today are much different than they were ten and even five years ago, partly due to the exponential growth of both the e-commerce and tech industries. Warehouses are now considered finely tuned logistics hubs that are designed and constructed to maximize every branch of your supply chain. Take a look at the trends that are shaping warehouses of the future.
Size of the warehouse footprint
While warehouses once used to be little more than facilities for shipping and receiving, they’ve been transformed into high-tech, close-to-fully automated processing centers. Research shows that the number of warehouse projects of 1 million square feet or more increased from 23 to 48 from 2007 through 2018. Lower construction and leasing costs are also making it possible for brands to invest in larger spaces.
One of the biggest contributors to this growth is big brand Amazon, which has about 250 million square feet in distribution and fulfillment warehouse real estate. Their network includes six different configurations of buildings ranging in sizes averaging from 600,000 to more than 1 million square feet. Other organizations are paying attention and understanding that size really matters to the bottom line.
Warehouses were once thought to be best placed in rural areas without the population density or complicated infrastructure that can make it hard for trucks and trailers to navigate. Now, millennials are demanding faster, smaller, and more direct-to-consumer shipping — it’s this demographic that continues to be the biggest driver of growth behind e-commerce.
In cities like New York, San Francisco, and Miami, the demand has increased for smaller warehouses with a footprint that extends up instead of out. This is especially helpful for last-mile fulfillment, another trend that has grown with the expectations of speedy shipping and even same-day delivery. These facilities are often renovations or reimagining of existing spaces instead of new construction. Labor is also a serious consideration when organizations choose locations for new warehouse spaces.
Modernizing today’s warehouse
The job market is tough and e-commerce brands are looking for ways to “perk up” their warehouses in order to fill the positions that keep things running smoothly. Cold, concrete buildings have evolved into workplaces that attract and retain some of the best talent out there. Industry upgrades even include outdoor spaces with pristine landscaping.
Although automation in warehouses has also helped innovate the spaces, there has been an increase in labor needs to help meet the increased demand from consumers. In turn, parking areas have grown and expanded warehouse footprints.
Sort out warehouse scheduling
Because customers have become accustomed to faster shipping, warehouse construction plans need to be fast tracked to capitalize on this demand. The “bones” of a building — HVAC, plumbing, electricity — need to be put in place first, and then the other elements added quickly to get products loaded in and ready for delivery.
Technology also has an impact on the timelines that construction must follow. Before tech is installed, everything else needs to be in place to provide the infrastructure that encourages success. Additionally, tech can be used at the forefront to efficiently schedule and track projects. The average turnaround time for a project that’s about 1 million square feet can be about 12 months.
It’s hot to be cold
According to CBRE data, “growth in online grocery and meal kit delivery sales in recent years will generate demand for up to 100 million additional square feet of cold storage warehousing space over the next five years.” This growth means that food could end up being a top disruptor in the warehouse construction industry.
Food-storage buildings aren’t just more expensive — four to five times as costly as traditional warehouses — but they also need special capabilities that require temperature and climate control. Often these guidelines are set forth by the FDA and OSHA to help protect inventory from the environment, contaminants, and even rodents.
Ultimately, experience from your commercial construction team will dictate the success of your next warehouse projects. Everyone from the top down needs to understand the complexities of modern warehouses that are driven by industry trends. As projects get bigger and more intricate, teams and their members need to be qualified; don’t skimp on this for lower costs.
By choosing G.S. & S., you can rest assured that your warehouse construction project coordinator stays with you from beginning to end. You are never handed off from contractor to contractor. We pride ourselves on communication and want you to feel like the valuable client you are, whether your project involves a few hundred square feet – or a million. Let’s get started on your next warehouse!