Distribution facilities reflect technological advances
Technology increasingly drives the distribution business, and new warehouses reflect the new world of logistics.
On their face, the technology-driven changes appear modest.
Clear heights inside warehouses are higher than they were a few years ago.
More yard space is needed for trailer storage.
But Reno-area developers who build warehouse space say nearly every major trend in their business is driven by some sort of technological change.
Take the matter of increasing clear heights.
Par Tolles, area director for Trammell Crow Co., says his company hardly considers a building these days with less than 30 feet of clear height inside, and other developers say 32- or 34-foot interior dimensions aren’t uncommon.
That makes sense from simple economics.
Companies that occupy warehouse space, after all, sign leases based on square footage but they use cubic footage.
Taller warehouses can hold more stuff.
Until recently, however, most forklifts couldn’t handle those sorts of heights.
As forklift technology developed, so did distribution centers.
A second technological factor was improvement of sprinkler systems to provide protection for taller warehouses.
Aaron Paris, the chief operating officer for Reno-based DP Partners, notes that the sprinkler systems and forklifts necessary to work inside a 32-foot-high warehouse each carry a price, and developers and users need to pencil out whether the more efficient use of space will offset the higher costs.
Or take the matter of space for trailer storage outside a warehouse.
Doug Roberts, a partner with Panattoni Development in Reno, says trailer storage areas traditionally haven’t gotten much attention a corner of a property that wouldn’t work for anything else often would be designated for trailer storage.
But today, Roberts says, trailer storage is a substantially bigger issue with many users, and the amount of land devoted to outside storage is on the rise at new distribution facilities.
The reasons again include technology transformations, says Paris.
Not that many years ago, he says, the folks who run a distribution facility probably would have had only a foggy notion about the merchandise aboard a trailer out in the yard.
With the advent of bar-code technology, however, logistics executives know exactly what’s in each trailer.
The upshot? Some of DP Partners’ customers, Paris says, roll a trailer from the yard up to the dock, unload boxes and immediately load them onto a trailer waiting nearby.
They manage a shipment that doesn’t take any warehouse space.
(That’s a twist on the “cross-dock” philosophy that has driven many larger warehouses in recent years.
Those warehouses bring goods into docks on one side, and ship it from the other seeking to reduce the amount of time inventory is in the warehouse itself.) A second factor driving the need for larger trailer storage yards, Paris says, is the high storage fees for intermodal containers.
Companies don’t want to pay those fees even for a day or two, and instead want to get containers onto their own property.
Other changes in the business environment are seen as well in new warehouse design.
Tolles says that most of his company’s customers want highly efficient ESFR fire systems the initials stand for “early suppression, fast response” and the trend is driven by lower insurance premiums for distribution facilities that invest in the fire systems.
DP Partners, meanwhile, routinely installs larger warehouse doors 9 feet by 10 feet now are standard even though the trucks that use them haven’t gotten any bigger.
“It’s like a tennis racquet,” says Paris.
“It gives the forklift driver a bigger sweet spot.”
“If you’re going to produce roughly 80,000 ounces (of gold) a year at $800 an ounce … and gold is at $1,900 or $2,000 per ounce, that’s going to create a tremendous amount of cash flow.”