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Future of warehousing: computational designs and autonomous trucks

What is the future warehouse going to look like? Digitalisation and autonomous technologies will reshape the way warehouses are used and built. For now the industry is struggling to cope with the demand of online retailers and questions about social distancing remain unanswered. Developers should not start rethinking the way they will build warehouses just yet. Autonomous vehicles will change large and small facilities but there needs to be due diligence. ‘Most facilities are designed with a massive yard so trucks can drive in and do a full 360 degree turn,’ says Luke Buchholtz Senior Director at CBRE Industrial and Logistics Project Management. ‘Autonomous trucks may mean yards could be smaller.’ Building specifications will change dramatically and one of the tools for that could be computational design. Full site Master plans done by a computer take significantly shorter than traditional methods.. ‘Designs may be different as the computer might see something people don’t,’ Buchholtz adds.

Digitisation on

The requirement to track your stock all the time has only increased during the pandemic. It has had a massive impact on the online sector. ‘Last year’s Christmas saw 21% of sales being placed online,’ Buchholtz

explains. ‘In April this year it hit 30%.’ There wasn’t an available slot for online shopping on most online platforms in the UK. Buchholtz believes the reason behind that was that even though firms have been doing online sales for a number of years, they had never thought the demand would skyrocket so quickly.

" Building a new cold storage place is very expensive. Retrofitting one is not as expensive but much quicker. "

‘The only one who seemed to grasp the demand was Amazon, because they have invested heavily into their supply chain over the past few years,’ Buchholtz continues.

The American giant is still looking for warehouses of any type to satisfy demand. Buchholtz echoes the words of many other experts that Covid-19 has been the acceleration of many trends in the industry for automation. ‘The main driver behind it is to squeeze out the efficiency you can get from a building,’ he continues. Such changes are very expensive unfortunately and not many companies can afford them.

Think carefully

Different distribution centres need automation at a different level. It might make sense for an Amazon facility to be highly automated because they need to execute their orders quickly, but for others the costs outweigh the benefits. ‘When you automate a building it doesn’t take people out of it,’ Buchholtz explains, talking about automation as a way to fight Covid-19 in the industry. Before going forward with automation companies need to consider how much it will cost them and if it is the best choice for them. 3PLs who have relatively short contracts and subsequent short lease lengths do not implement a lot of automation as many tasks are done manually.

Piling up

Because consumers stockpiled in March retailers recorded their best sales on record for this time of year. This however, hit April’s demand and incoming stock levels piled up. Currently retailers are struggling to find free space where they can keep excessive stock. Latest data show online sales in 2020 have reached a level of 32.8% in May.

148 new buildings

The expert thinks the rise on online demand will lead to retailers looking for even more space, as they are good at adapting to demand very swiftly. For him the question is whether the UK has enough available buildings. If online hits 30% penetration by 2030 there will be an additional demand for 69 million sq. f. which is around 148 buildings. This scenario is for a 1% growth in demand each year.

Buchholtz thinks this will drop down but with an important condition, a number of those who took their first steps into online shopping might decide to continue. If only 20% of the people decide to do it again in particular food retail which jumped 6% to 13%. This may be a significant demand for cold storage,’ Buchholtz says.

Buchholtz admits it is hard to predict where new buildings will go. However, he looks at autonomous vehicles as a possible solution. ‘A highly automated building with autonomous vehicles means they could drive continuously,’ he says. ‘This will remove the need for big facilities to be near people.’

Mature market

Covid had frozen the investment market for two months, however many projects were still going on. CBRE works on large projects across the world with most heading down a green way and putting sustainability in the lead. Buchholtz advises companies to review where they are. In the USA companies are waiting to see how the market is settling. Luke Buchholtz is Senior Director and Head of Industrial & Logistics Project Management and Industrial Sector lead for CBRE Building Consultancy.

There aren’t many speculative developments and availability has fallen to less than 5%. Developers are more reluctant to build speculatively compared to 2008. ‘It might be because the market is more mature,’ Buchholtz says.

Office space

Buchholtz doesn’t think office spaces could be easily transformed to accommodate storage facilities despite some expectations in the industry. ‘Offices have very low floor to ceiling height and very low floor loading capacities,’ he explains. Underground car parks and loading bays are more suitable to micro-fulfilment if the right technological solution is found. ✷

Social distancing in warehouses

The way warehouses operate means people can generally keep their distance away while working. The problem comes during the beginning and end of shifts, lunch breaks and in areas where the administration and facilities are. ‘Splitting shifts into slightly different patterns could resolve some of these problems, but this is no final solution,’ explains Luke Buchholtz