Growing e-commerce sales are causing retailers to look for faster and more efficient distribution models. Some are locating their warehousing closer to their customer, but square footage for new warehouse facilities is tight in densely populated transportation hub cities such as New York City, San Francisco and Los Angeles.
One solution in use in Asia and Europe is building multistory warehousing. Prologis, the world's largest warehouse company, is changing how warehouses are configured and building a new facility in Seattle up instead of out.
The Wall Street Journal reports that Prologis will start building a new 580,000 square foot building next year just outside downtown Seattle. It will be the first of its kind in the U.S.
The building will have the standard ground-level docks and loading areas found on existing warehouses, but will feature a second level truck ramp to loading docks that will be able to support commercial vehicles. A third level with freight elevators will be used for lighter warehouse operations.
The company says the multilevel warehouse will not necessarily bring down rental rates which have been increasing in urban areas due to increased demand, but the cost may be somewhat offset by the efficiency of having smaller, short term storage available for immediate delivery.
Andrew Hogenson, a Seattle-based retail consultant with Ernst & Young LLP, said the storage and distribution model has changed and retailers are no longer just moving big volumes from one remote location to a big-box suburban store, but are instead moving much smaller volumes to many points locations.
Not every urban area is welcoming the multilevel warehouse concept with some experts calling the Prologis build a "grand experiment". Read more of the WSJ's article here: