Multi-Level Distribution Centers: When the Only Way You Can Build is Up

E-Commerce in 2019 is all about “last mile” delivery, meaning deliveries that go to an end-user or customer in a matter of hours instead of days or weeks. In densely populated cities like Manhattan, last mile delivery is made harder by the distance between the customer and the distribution center their goods are coming from – that’s where Multi-Level Distribution Centers step in.

We sat down with our Senior Project Engineer Mike Sugrue, who gave us the down-low on building higher. “E-commerce centers now are on big, huge, virgin tracks of greenspace, often in clusters close to truck routes, and they build out horizontally because the space exists away from population centers and is relatively inexpensive. So, businesses need to get these centers where the people are in order to accomplish the one to two-hour delivery target time.” With land at a premium in cities like New York, that means the only way to build the spaces required is to build vertically.

In a city with a long history of servicing industry, there is a surprising lack of appropriate space available – mostly because they’ve been repurposed and converted into multi-family housing and lofts. Even if such buildings were available, many aren’t suitable for modern distribution center requirements like 30-foot clear heights, open bay spacing, and other features designed to replicate, as best as possible, the client’s traditional e-commerce layout that makes their operations efficient.

Sugrue points out, “Additional concerns with the space for racking are also common. Incorporating the racking loads supported by floors instead of slab-on-grades, and there’s been challenges there incorporating all the point loads safely in the structure.”

There have been other unexpected challenges, too. “Because property and the cost of land is so expensive, owners and developers need to maximize the amount of buildable land on those sites, and that means closer proximity to the property lines, which results in vertical setbacks that have to be incorporated into the building due to zoning regulations. This is a different factor that you’re not faced with in a normal build for an e-commerce center,” said Sugrue, who also notes that this has been one of the most unexpected challenges about designing Multi-Level Distribution Centers.

So, what’s in the future for these new bastions of e-commerce industry? Sugrue says, “It’s in its infancy, so I think as it progresses, the market will determine what’s worked and what’s not been successful as a payback feature. The needs that evolve will affect our design of the structures – we’ll build in refinements and efficiencies.” While he says it’s unlikely we will see these types of structures outside of cities with densely populated neighborhoods, there are still lots of places where these buildings will be needed more and more in the future.

“The bar continues to move on faster delivery for online shipments, and all the studies have shown the people that are more inclined for online purchases are only going to grow. Because these customers tend to represent a younger demographic, they haven’t even reached the peak buying years. Online sales are only 15% of retail right now, that’s only going to go up. Multi-Level Distribution Centers seems to be a solution for faster delivery in dense areas. Everything has shown that it’s going to go up.”