Since e-commerce has expanded over the past 10 years, it is natural that the industries that support it expand as well. One of these industries is the construction industry, with the increase in the construction of warehouses. Warehouses used to be only for big corporations to house excess products or short-term storage of perishable products. Today, the majority are being built for e-commerce businesses and adapted to their needs. A prime example is Amazon. Amazon has built warehouses to house its 75 fulfillment and 25 sortation centers in the U.S. However, warehouses can have other uses due to their shape (box) and size. They can also be data centers and wholesale clubs. Let’s take a further look at the types of warehouses.
- Distribution Centers — These warehouses are temporary homes for products, which are shipped from manufacturers to suppliers. They are part of the “supply chain” and suppliers ship the products within a day of receiving a shipment.
- Automated – This type of warehouse is fully automated, using the latest technology (i.e. artificial intelligence). There are a limited number of employees that work in it and robots are utilized for certain tasks. For example, the automated warehouse for online supermarket Ocado has a huge grid, like a chessboard, where machines will process “3.5 million items or around 65,000 orders every week.”
- Public – This is another warehouse that is set up for temporary distribution. The company that owns the warehouse will lease to another company for a short or long-term period, usually on a month-to-month basis. The owner can charge per pallet or per each square foot of space that is used as well as offer other services, such as inventory management and shipping.
- Private – This warehouse is privately owned and can be a division of a company. It can also be on-site or off-site. An off-site warehouse can also serve as a distribution center of finished goods.
- Climate-Controlled – As it implies, the warehouse is climate controlled to prevent spoilage or damage to products. This type of warehouse is primarily needed where the relative humidity is high all-year long (i.e. Florida). Aside from food, other products that need this type of warehouse include silicon wafers and commercial adhesive-backed paper. Moisture can ruin these products, costing thousands of dollars in damage.
E-commerce is driving the need for the construction of warehouses. Each type of warehouse is needed for a particular niche and will be adapted to it. Warehouses will continue to be an important part of the supply chain, and it will be interesting to see how traditional businesses will utilize them in the future.