If you’ve been paying attention, you know the pandemic-driven eCommerce demands have amplified an already frenetic building trend: distribution centers (DCS), or warehouses. According to CBRE Research, every $1 billion in incremental eCommerce generates an additional 1.25 million sq. ft. of warehouse space demand for construction. Today’s existing warehouse space simply cannot meet industry requirements. In fact, the warehouse shortage is so drastic, UPS resorted to creating Ware2Go, a digital tool that helps shippers find on-demand warehouses.
When Forbes magazine interviewed warehouse executives this year, Forbes found that warehouse building was their top priority for the next one to three years, which impacts the architects and specifiers reading this who must be versed in the signature requirements of eCommerce warehouses.
But the U.S. is playing catch-up.
There’s been a 31% jump in warehouse construction since 2018, per Dodge Data & Analytics, undoubtedly buoyed by the 12% of all grocery purchases to be purchased online by 2025, according to Bain & Company’s research. In 2021, there are more than 1,200+ logistics properties under construction. Dodge Data and Analytics found that up to 12% of the total warehouse construction market was Amazon’s, and MWPVL Research Firm stated that Amazon is adding at least 92 million square feet and 313 new building spaces this year.
“Non-residential construction is mostly warehouses,” said Richard Branch, the chief economist for Dodge Data Analytics. “…we’re building almost as many warehouses as we are K-12 schools and colleges and universities That’s just a stunning turn of events.”
In the next five years, CBRE Research deems the Southwest and Southeast U.S. as the fastest-growing regions for new distribution centers. These are the areas CBRE Research is forecasting to experience robust industrial development:
Demand for eCommerce warehouses and DCs is creating the buildup for building up. These unique designs demand higher ceiling heights – of 40 feet or more – so the facilities can accommodate pallet automation, unlike the 20 feet-high warehouses contractors had grown accustomed to building prior to the pandemic. Architects and specifiers are the agile designers who must pivot and be ready for new and diverse requirements, whether the building project is a simple storage warehouse, a refrigerated warehouse for food storage, or a humidity-controlled warehouse. Objectives must be clearly defined: is the accent on fueling efficiency, or more focused on creating a more flexible space to cater to diverse customers?
Best Practice eCommerce Warehouse Design Considerations:
- Environmental Control Requirements – Is it a cold storage facility where you need to avoid unused space and be mindful of where you’re placing offices vs. cold rooms? Do you factor in flexible temperature areas for frozen vs. merely refrigerated foods?
- Ceiling Heights: How much clearance do you need between the sprinkler heads and the top of the pallet load according to the building code for that address? 80% of warehouse activity comes from 20% of the SKUs. 40 feet high or more is typical for accommodating automated pallet systems.
- Building Envelope Decisions: Is it concrete tilt-up or pre-engineered metal construction? Builders prefer concrete tilt-up for their durability, longevity and for meeting higher square footage requirements. (In earthquake-prone California, general contractors are building 90% of their one-story industrial building projects with tilt-up construction.)
- Areas Needed in eCommerce Warehouse Designs: Receiving (where unloading, labeling and quality control occur), Staging (with room for at least one day of orders), Shipping (for pack and ship plus larger pallet breakdowns), Dead Stock Area, Foot Traffic, and
- Flooring: Slab durability is key for heavy equipment and foot traffic, including the cures, sealers, and the smoother finishes that provide less foot drag resistance for employees walking on them eight or more hours daily.
- User Experience-Friendly Pick Paths: These should be located nearest the designated shipping space. The building owner must know to tell you which style of order picking is being used in this warehouse so you can factor this into your design. The three picking process types are: Wave Picking, Batch Picking, or Zone Picking.
- Lighting Design: Incorporating natural lighting such as skylights into designs affects employee safety, mental health, alertness, energy, productivity and even employee retention. A British study published in The Responsible Workplace found natural lighting resulted in “happier workers, less absenteeism and fewer illnesses, because it encouraged satisfaction and productivity among workers.”
- Space Needed: Typically, 3 million+ total square feet, but the building owner needs to state the max number of SKUs, pallets, and cartons they’re carrying, multiplied by the dimensions of the average pallet or carton’s size in cubic feet.
Warehouse Sustainability Design Needs:
- Energy efficiency (air, moisture and vapor barriers) will drive design
- Skylights (already required in California)
- LED lighting
- Solar panels
- Cool-roof systems
- Eco-friendly building materials
- Accessibility to electrical vehicle chargers
Industry experts are forecasting an increase in electricity amperage requirements because warehouses are maximizing their use of robotics, automation, electric vehicles, plus the additional HVAC necessary to improve employee comfort. Building owners will have increased pressure and incentives to offset their carbon footprints by incorporating solar and wind energy into their building designs. This inherently impacts architects and specifiers.
How ESG Will Impact Future DCs and Warehouse Designs
By now, most of you reading this are aware of ESG, which is the acronym for “Environmental, Social, and Governance.” Once the greenwashing of the past becomes supplanted by measurable metrics and standardized disclosures for GHGs (greenhouse gases) reduction and the ESG score goes mainstream, it will have an enormous impact on the entire building industry supply chain. For example, it will become commonplace for architects and specifiers to incorporate modular building systems into an eCommerce warehouse project design to maximize the ESG score on a building design (anything below 50 is poor; 70 and above is considered a good score).
Here are a few ways a fully ESG-integrated world will impact the construction industry:
- The supply chain industry, from shipping to truck drivers, will be monitored, measured, and scored
- Building developers will have to show (and possibly improve) their ESG scores to qualify for commercial loans
- Building supplies manufacturers and distributors will have to show high ESG scores to qualify for getting specified for projects, especially for government contract projects
- General contractors will also have to conform to mandated metrics to qualify for winning bids on building projects
For architects, engineers, and specifiers, the decade ahead will be a busy and exciting time to create and design with an eye on innovation and sustainability, but for 2021, it all starts with responding to the frenetic need to fulfill eCommerce warehouse designs.
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