E-commerce retailers and traditional retailers with robust eCommerce platforms can use the distribution chain to vary based on their products and customers.

Three primary warehouses are involved in e-commerce distribution:

1. Break-bulk services at the national level.

2. Fulfillment centers are located in the region.

3. Last-mile warehouses are located in urban and suburban infill zones.

National and Regional Warehouses

To determine the type of facility needed in a specific location, ask: Are you building it [for] a national, regional, or last-mile [user]?"

He should be careful to clarify his statements. When items arrive at a port, they are taken to a breakbulk facility. Large quantities are then broken down into smaller groups for transport to local locations. Items kept in regional warehouses can be sent to last-mile facilities that are near consumers' homes.

Although the sizes of each facility are difficult to determine because of differences in supply chains, there are 400,000-square footage warehouses nationwide and 500,000-square footage warehouses regionally. Then, there is Last-mile delivery, which consists of 50,000 to 100,000 square feet.

New Warehouse Distribution Network

E-commerce is changing the way the whole [warehouse distribution] industry works. So, for example, a shoebox would need to be transported to a store once a week.

It is no longer necessary to have a traditional retail distribution system of warehouses to shop. However, you will need to create a new warehouse distribution network if your goal is to start an e-commerce company.

Retailers need different types and locations of warehouses to create this chain. So the first thing they need is where did the product come from?

Most finished consumer goods from Asia are brought in via the port of L.A. before going on to other ports in the U.S., like Chicago or Dallas.

Breakbulk Warehouses

Location

These facilities can be found in or near major industrial markets and seaports throughout the U.S., such as Long Beach (California), Dallas, Chicago, Newark, New Jersey, and Long Beach (California). These sites often have hundreds of warehouses and are close to major multimodal transportation hubs. These hubs may include rail lines, shipping lines, and extensive highway networks.

Land proximate these ports are often taken up with commodity storage. This makes it more valuable for the port. These bulk facilities can be located an hour to 90 mins away from the port but are still fully functional for tenants.

Design, Circulation

These bulk facilities are usually 500,000-1.5 million square feet in size. Each tenant is responsible for their own operations.

Clear heights in warehouse design have become an important dimension in the e-commerce era. Some users may need clear heights up to 40 feet, but this is not the case for all tenants.

The importance and parking of tractor-trailers are vital. One trailer space per 5,000 sq. feet is the ideal size for bulk storage.

There has been an increase in demand for parking for employees in recent years. While there is sometimes more parking, the goal ratio for personnel parking should be one space per 2,000 feet.

Regional Fulfillment

A variety of people uses mid-sized buildings. These include national or regional businesses and local food suppliers.

Location

These facilities tend not to be in major metropolitan areas. Because most finished goods are transported by truck rather than rail, it is crucial to have close proximity to interstate highways.

Design, Circulation

These buildings range in size from 150,000 to 400,000 square feet. However, these are only general ranges.

Most buildings have clear heights between 28-36 feet. However, I think 32-foot is the best.

There is still space for van parking and trailer parking in mid-sized buildings. Permitting personnel parking in midsize buildings can be slightly more than in bulk facilities. There are 1.5 spaces per 1,000 square feet considered optimal.

These properties use a tremendous amount of power to charge forklifts, other vehicles, and air conditioning. In addition, refrigerating needs in buildings can increase that power consumption to over 4,000 amps.

The Last Mile

Uses

To e-commerce, tractor-trailers are coming in at the regional level. A fleet of vans, usually sprinter vans, are waiting to pull up.

Not only are e-commerce companies using them, but also service providers who are providing supplies to the business community (such as medical supplies and construction materials).

Lowe's, Home Depot, and Amazon all have their own last-mile distribution networks. Other companies, however, will likely just use FedEx, UPS, or DHL to ship the items.

Locations

It's all about location. The last mile facility users are more concerned with accessing interstates, truck networks, and other elements than the ceiling heights.

Design and Circulation

These buildings typically load on one side. However, some new properties are being built at clear heights of 32ft. This is not because tenants need it but because institutional investors think that these heights will improve the position of properties in the future.

Infill buildings can be smaller than midsize structures. They range between 75,000 and 200,000 sq. ft. Some mimic traditional flex footprints and come in under 50,000 square feet.

Developers rarely build more than what is allowed by local zoning. So although we could cut that number to get a larger building, it will ultimately hurt the asset.