While many industries have suffered under the pandemic, the demand to develop warehouses and distribution centers has skyrocketed. The global supply chain has changed dramatically to accommodate shifts in consumer behavior.
Customers increasingly purchase goods online and expect delivery to their doorsteps, and this has only been accentuated by COVID-19 lockdowns. Logistics experts predict this trend will continue even as the economy re-opens. Currently, developers can’t build warehouses fast enough to meet demand. Competition for suitable sites is fierce and developers often need to think creatively in a continually changing market.
Developers planning a warehouse or distribution center would be wise to consider the following:
Location, location, location
Location is the most important consideration and the biggest challenge when it comes to warehouse placement. Warehouses should be sited near interchanges and large highways. But overwhelming demand has led to many of these areas being developed already. This has led to many new warehouse sites proposed closer to residential and commercial areas. Or, further out into rural areas with ample land separated from the workforce they need.
Despite the economic benefits, many community residents, and even some businesses, often push back against plans to build warehouses close to residential areas and urban settings. They object to the noise and traffic, the size and height of the buildings, and the vast real estate warehouses occupy.
This can be overcome by engaging with local and state officials. Municipalities and developers can cooperate on zoning and planning, such as pre-planned industrial parks, potential new interchanges, or other creative ways to plance industrial areas. This coordinated development helps minimize impacts such as traffic and noise, while ensuring townships and municipalities get new business, and a new source of tax revenue.
Developers can also think more creatively about where to build warehouses. Local ordinances and community sentiment may mean siting a warehouse further away from a highway interchange but still within easy distance of major roadways. Underutilized and unused older industrial sites in urban areas that are still accessible to commercial areas can be re-developed. Some of these older industrial sites even have rail that is still available on-site.
Size is not everything, speed matters, too
There continues to be high demand for large, million-square foot warehouses. More space for inventory means more supply for rising demand. But consumers are also demanding faster, often same-day delivery, another trend only accentuated by the pandemic. This means more demand for smaller warehouses that can fit better into urban or even suburban settings, to ensure a streamlined and quick “last mile” delivery process for the communities they serve.
Consider the workforce
A warehouse is not just a facility to store inventory. It’s a place of business, often with a large workforce. It will employ packers, material handlers, forklift operators, clerks, supervisors, and managers.
Overwhelming demand has begun to push warehouses into less populated areas with good highway access, and ample land. But straying too far from populated areas means limiting your workforce options, which makes finding qualified employees more difficult and expensive.
Expertise can overcome physical challenges
Finding the right location is the biggest challenge, but developers face other challenges related to the physical conditions and surroundings of the site itself. You must consider everything from stormwater management to ensuring the availability of adequate utility service, and site circulation to create efficient movement and flow of traffic in and around the site.
Working with the right team is key. An innovative, capable design team of architects and engineers can ensure any physical challenges and issues are resolved before the warehouse opens for business, and don’t become headaches later.
Building a warehouse might seem straightforward, especially given the high demand for them. But there are many considerations developers take into account. Those who can balance all these considerations can realize great successes in an ever-growing market.
Mark Buchvalt is a Group Manager and engineer for T&M Associates, a leading national consulting, engineering, environmental, technical services, and construction management company