Reasons for Going Vertical and Modernizing Industrial Warehousing in First-tier Markets

Reasons for Going Vertical and Modernizing Industrial Warehousing in First-tier Markets

by Proforma Construction Inc, May 6, 2021

The ongoing COVID-19 pandemic has supercharged online shopping in the U.S., as reported by Statista. While some online purchases during COVID-19 have purely been for convenience purposes, a majority of online shoppers have embraced ecommerce in order to protect themselves against the novel coronavirus. However, the surge in online shopping has also caused an increase in demand for last-mile logistics, with distributors striving to secure storage space in warehouses and distribution centers. With limited capacity and lack of modernization in these warehouses, storage is now a challenge in first-tier markets.

To solve this problem, experts now recommend going vertical by building multi-story warehouses and modernizing industrial warehousing. Read on for some more information on this topic.

Prime Location of Storage Buildings

Most storage buildings are situated in highly industrialized areas, usually urban areas. With a warehouse in a convenient location, supply and logistics become easier for all parties. Thus, it is prudent to maximize the use of facilities in prime areas by expanding them vertically to accommodate goods.

Scarcity of Land in Urban Areas

According to the U.S. Census Bureau, American cities only occupy 3.5% of the land area, although they accommodate a whopping 62.7% of the U.S. population. This shows just how congested cities are and why securing land to construct a structure is difficult. While urban areas provide an optimal environment and facilities to make business boom, there is limited space for expansion. In other words, lack of enough land is one of the major drivers of going vertical in storage facilities.

Accommodating Advanced Technology

The average height of warehouses and distribution buildings in the U.S. in 2020 was 32 feet, a 0.9-foot increase from 2017, according to Statista. Although the increase in height provides more storage space for products awaiting distribution, it also complements advanced technology. Some of the modern technologies gaining popularity in the logistics industry include robotics, sensors, wearables, cloud-based management, smart warehouse systems, and the internet of things (IoT), among others.

Demand for Improved Designs

Occupiers of storage facilities now want improved designs, including maximized heights, for convenience purposes. This is because warehouses with greater heights generally offer more storage space. The new designs are also appealing to the users, who want nothing but to maximize the value of their property.

Promoting Forward Stocking

As the e-commerce industry booms in the U.S. during the COVID-19 pandemic, grocery stores as well as delivery companies are struggling to keep up with the demand. To help stabilize the market, experts recommend increasing forward stocking locations, especially in the urban areas since that’s where the bigger population resides. With the delivery distance shortened, consumers will be able to receive their purchases on time and the delivery companies will find it easier distributing products. That said, going vertical and modernizing the existing storage facilities is an incredible way to develop forward stocking facilities near the consumers.

Shaping the Future of Logistics

Thanks to the convenience that comes with online shopping, most online shoppers in the U.S. now intend to maintain that shopping style even after the pandemic. This means that the demand for storage facilities and logistics services will most likely stay high. It is for this reason that construction experts are focusing on increasing the heights and modernizing industrial warehouses to meet possible future demand.

These are some of the key reasons for going vertical and modernizing industrial warehousing in first-tier markets in the U.S. Are you looking for an experienced construction company in the Bay Area? Contact the experts at Proforma Construction to learn more about how we can resolve all your construction needs. We are available at your service even during the pandemic.