The Effect of Quicker Delivery Demands on Warehouse and Distribution Center Sizes

Advancements in technology that opened consumers up to a world of online shopping and faster delivery times have changed the way businesses create distribution center design, with smaller warehouses becoming more popular and more expensive to rent.

The days of large, sprawling multi-story warehouse and distribution complexes in the outlying areas of metropolitan areas have given way to smaller industrial facilities that are closer or within urban areas. The adjustment to an ever-changing retail landscape has seen logistics and transportation providers more flexibility and the chance to serve their customers in an ultra-competitive marketplace better.

Distribution Center Design for Faster Turnarounds

Smaller fulfillment centers use a distribution center design that promotes a faster turnaround for retail products as customers demand delivery within a couple of days of ordering. These multi-level warehouse facilities are not designed for storing products. The quicker items are moved from the facility, the less space is needed in the warehouse, and the cheaper the rental space will be with less square footage needed.

The construction of smaller warehouses is expected to continue to rise in more highly populated areas with the public’s demand for quicker delivery demands.

Technology to Drive Future of Small Multi-Level Warehouse Design

Customer demands and trends have branched off into territories no one in the industry could have predicted before the ability to easily and conveniently order any kind of retail product with the click of a mouse from the computer in your home or the phone in your pocket. E-commerce will continue to drive trends in retail sales industries. Smaller, compact multi-story warehouse designs will refine and adapt in the next wave of technological advancements and improvements.

Recent and upcoming trends in the e-commerce landscape that will change the size and operational functions of warehouses and distribution centers include:

Customized Fulfillment Centers

Localized distribution and fulfillment centers will get even more specialized to provide customized warehousing features to increase productivity and delivery times. Customers are better able to customize their orders to specific dimensions and attributes with the same delivery period as pre-made products.

Automation

Automated warehouse facilities see significant increases in efficiency, accuracy, and overall productivity. Over time, as automation systems have become more advanced and less expensive, it is becoming the industry standard operating procedure for warehousing, distribution, and fulfillment centers for industries of all kinds and sizes.

Artificial Intelligence

The rise in artificial intelligence technology allows companies to use small fulfillment centers by expanding on the information gathered regarding product and customer information.

Demand for Multi-Story Warehouse Facilities Results in Higher Rents

As the demand for smaller multi-story warehouse and distribution center rises, the cost to rent these facilities has also increased. A study by the CBRA Group showed that rents rose significantly for warehouses between 70,000 and 120,000 square feet, while availability fell to 7.4 percent, compared to 11.3 percent in the last five years.

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If you are an investor looking for small, e-commerce based multi-level warehouse, distribution, and fulfillment center, log onto MyEListing.com today. We are a large online resource for all kinds of property opportunities in the commercial real estate industry.

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