Trends in Warehouse Construction

The conveyor was the operating system of the warehouse for decades. For 40 years, we built automation around a simple assumption: products move, infrastructure stays fixed. Modern warehouses face constantly changing SKUs, shifting order profiles, unpredictable demand, labor shortages, and increasing pressure for faster fulfillment. The challenge is no longer simply automation. It’s creating systems that can continuously adapt and reconfigure themselves. Recently, I looked at Mujin Europe Robotic Case Picking concept. What stood out was the architecture behind it. AMRs, robot arms, vision systems, palletizing, orchestration, and digital twins operate as one connected software-defined system. When operational requirements change, the response is not necessarily new hardware: → It can be a software update. → Adding capacity becomes modular. → Workflows become configurable. → Optimization becomes continuous. In many ways, warehouse automation is starting to follow the same evolution we already saw in computing: from hardware-defined systems to software-defined systems. The most valuable warehouse of the future may not be the one with the most automation. It may be the one that can adapt its behavior the fastest. Congrats Ross Diankov, Issei Takino and team behind it, hypnotizing to watch! ~~ ♻️ Join the weekly robotics newsletter, and never miss any news → ziegler.substack.com

Warehouse automation is moving from one-off projects to an operating model, and the winners over the next 3-5 years won't be whoever buys the most robots. They'll be the operators who combine profile-led automation selection, orchestration, labor-model redesign, and real estate strategy into a repeatable playbook. In this briefing, I cover where adoption actually stands (still under 25% of North American warehouses despite double-digit growth), why labor and wage pressure isn't cyclical but demographic, why build-to-suit facilities with taller clear heights are becoming the answer to rising real estate costs, and why the new national security determination on foreign-produced mobile robots just added a tariff and supply-chain variable that will separate fast movers from everyone else. I also get into the seven automation categories doing the real work today, why "peak day, not average day" needs to drive design decisions, and why more providers are selling directly to 3PLs and end users instead of through integrators. AutoStore™ GreyOrange Hai Robotics Locus Robotics Kenco Group #WarehouseAutomation #SupplyChain #Robotics #Logistics #3PL

I stopped designing warehouses for efficiency when efficiency stopped holding up. Across regions, the pattern is consistent. — Tariffs shift. — Weather disrupts. — Borders slow. — Labor tightens. — Cyber risk rises. Highly efficient warehouses fail first. 2026 warehouses are designed for disruption because disruption is constant. • Geopolitics remain unstable. • Extreme weather is more frequent. • AI-driven attacks are rising. • Demand shifts faster than fixed plans can adapt. Efficiency breaks under uncertainty. Resilience holds. What works now: → Reconfigurable layouts → Flexible automation, not lock-in → AI for forecasting and scenarios, not just speed → Visibility that drives action → Cybersecurity treated as operational risk Warehouses are no longer built for “normal.” They’re built to keep moving when normal disappears. Efficiency is a fair-weather strategy. Resilience keeps operations running.

📦 𝐓𝐡𝐞 𝐀𝐦𝐚𝐳𝐨𝐧 𝐄𝐟𝐟𝐞𝐜𝐭: 𝐖𝐡𝐚𝐭 𝐓𝐡𝐞𝐢𝐫 $𝟏𝟓𝐁 𝐖𝐚𝐫𝐞𝐡𝐨𝐮𝐬𝐞 𝐏𝐮𝐬𝐡 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐚𝐥 𝐓𝐞𝐧𝐚𝐧𝐭𝐬 While most occupiers are pulling back, Amazon is doubling down. As construction costs rise and industrial demand cools, they’re betting big on long-term control and infrastructure dominance. 🏗️ 𝐀𝐦𝐚𝐳𝐨𝐧’𝐬 𝐞𝐱𝐩𝐚𝐧𝐬𝐢𝐨𝐧 𝐢𝐬 𝐚𝐛𝐨𝐮𝐭 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 𝐰𝐚𝐫𝐞𝐡𝐨𝐮𝐬𝐞𝐬—𝐢𝐭’𝐬 𝐚 𝐡𝐞𝐝𝐠𝐞 𝐚𝐠𝐚𝐢𝐧𝐬𝐭 𝐫𝐢𝐬𝐢𝐧𝐠 𝐜𝐨𝐬𝐭𝐬, 𝐬𝐮𝐩𝐩𝐥𝐲 𝐜𝐡𝐚𝐢𝐧 𝐫𝐢𝐬𝐤𝐬, 𝐚𝐧𝐝 𝐫𝐞𝐚𝐥 𝐞𝐬𝐭𝐚𝐭𝐞 𝐬𝐜𝐚𝐫𝐜𝐢𝐭𝐲. Here’s what corporate tenants need to watch: 🔹 𝐀𝐦𝐚𝐳𝐨𝐧’𝐬 𝐋𝐞𝐚𝐬𝐞 𝐏𝐥𝐚𝐲 𝐑𝐞𝐰𝐫𝐢𝐭𝐞𝐬 𝐭𝐡𝐞 𝐑𝐮𝐥𝐞𝐬: While most tenants chase short-term flexibility, Amazon is committing to 15–25-year leases. It’s a strategic move that locks in stability, strengthens negotiating power, and positions them ahead of the curve. 🔹 𝐓𝐚𝐫𝐢𝐟𝐟𝐬 𝐀𝐫𝐞 𝐑𝐞𝐝𝐫𝐚𝐰𝐢𝐧𝐠 𝐭𝐡𝐞 𝐂𝐨𝐬𝐭 𝐄𝐪𝐮𝐚𝐭𝐢𝐨𝐧: From steel to smart systems, material prices are climbing fast. Amazon is moving now—locking in assets before inflation and global volatility drive costs even higher. 🔹 𝐋𝐚𝐬𝐭-𝐌𝐢𝐥𝐞 𝐀𝐜𝐜𝐞𝐬𝐬 𝐈𝐬 𝐚 𝐂𝐨𝐫𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲: Amazon continues to secure fulfillment centers in key metro and rural zones to shorten delivery times. These sites are limited—and the race to grab them is intensifying. 🔹 𝐑𝐨𝐛𝐨𝐭𝐢𝐜𝐬-𝐅𝐮𝐞𝐥𝐞𝐝 𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐲 𝐈𝐬 𝐭𝐡𝐞 𝐆𝐨𝐚𝐥: Their newest facilities are built with automation in mind, creating faster, more efficient operations that give them a competitive advantage others can’t easily replicate. 🔹 𝐋𝐚𝐲𝐢𝐧𝐠 𝐭𝐡𝐞 𝐆𝐫𝐨𝐮𝐧𝐝𝐰𝐨𝐫𝐤 𝐟𝐨𝐫 𝐚𝐧 𝐀𝐈-𝐏𝐨𝐰𝐞𝐫𝐞𝐝 𝐍𝐞𝐭𝐰𝐨𝐫𝐤: Warehouses are evolving into tech-enabled infrastructure. Amazon’s investments in AI, cloud, and logistics are converging to cement their long-term control of the supply chain. Smart tenants can’t afford to ignore this shift. The best deals—and prime locations—are available now, before the next crunch. #𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐚𝐥 #𝐖𝐚𝐫𝐞𝐡𝐨𝐮𝐬𝐞 #𝐂𝐑𝐄 #𝐀𝐦𝐚𝐳𝐨𝐧 #𝐋𝐨𝐠𝐢𝐬𝐭𝐢𝐜𝐬

Modern Automated Storage and Retrieval Systems (AS/RS) are taking a major step forward with the integration of Artificial Intelligence (AI). This new combination not only moves goods automatically but also analyzes operational data to refine storage strategies, predict maintenance requirements, and adapt to shifting demand patterns. Algorithms take in real-time data from IoT sensors placed on cranes, shuttles, or conveyors. By monitoring throughput rates and equipment performance, these algorithms learn to spot trends, forecast peaks, and even detect the early signs of mechanical wear. The system can then optimize slotting strategies—placing high-demand items closer to picking stations or rescheduling restocks during off-peak hours. It also triggers maintenance alerts before issues lead to downtime, protecting both productivity and worker safety. This approach offers several key advantages: 1️⃣ Improved responsiveness: AI-driven AS/RS reacts to operational changes almost instantly. 2️⃣ Greater accuracy: sensor data helps minimize picking errors and misplacements. 3️⃣ Scalability: automated decisions enable consistent performance even as SKU counts grow or sales channels multiply. For warehouses looking to modernize, implementing AI doesn’t necessarily require a full system replacement. Many existing AS/RS installations can be upgraded through software enhancements, sensor retrofits, and improved data connectivity. By leveraging AI’s predictive capabilities, facilities can become more adaptable, cost-effective, and ready to handle whatever the next decade brings. Image: GEBHARDT Intralogistics North America #ASRS #AI #WarehouseAutomation #Retrofit #Efficiency #IoT #Resilience

Census Bureau’s newly benchmarked data for value of construction put in place for warehousing provides strong evidence that the long-awaited slowdown in warehousing construction has begun in earnest. One chart below. Thoughts: •This chart shows seasonally, and inflation adjusted value of construction put in place, where I deflate nominal value put in place with the producer price index for warehousing construction (https://lnkd.in/gEFpbe6V). •May 2024's reading was just 23% above 2019 levels, whereas peak construction in Q2 2022 - Q3 2023 was ~45% above 2019 levels. •Something that hasn’t received enough attention is how the massive hole in warehouse construction caused by the Global Financial Crisis has likely contributed to warehousing capacity becoming constrained with e-commerce growth. Whereas we saw warehouse construction fall by ~60% from 2007 levels during 2009 and 2010, e-commerce sales as a percent of retail trade sales were steadily growing (https://lnkd.in/ex5WQw5K). Implication: now that we are past peak warehousing construction, the question is how far will this series fall? #supplychain #supplychainmanagement #construction #warehousing #freight

Big returns are coming in small packages? It seems like some of Chicago’s industrial developers are shifting focus and this time, it’s all about small-scale warehouses in infill locations! Why? Because the sub-50K SF tenant market is red-hot. And in a city where modern last-mile space is limited, these new Class-A builds are exactly what growing companies are looking for. In just the past few months: •Glenstar is redeveloping obsolete buildings under 100K SF •HSA & Range Group are launching twin 35K SF warehouses on the Near West Side •CRG is doubling down with The Cubes at ORD and more small-bay projects on the way Vacancy in the O’Hare submarket? Under 2.5%. Developers willing to build smaller and smarter are commanding top rents, filling critical gaps, and staying ahead of demand. Thoughts on this strategy? https://lnkd.in/gKmpFuM8 #CRE #IndustrialRealEstate #LastMileLogistics #ChicagoDevelopment #InfillProjects #UrbanLogistics #Warehousing #SupplyChain #RealEstateDevelopment #SmallBaySpace

China is redefining logistics with a new kind of warehouse, one you can barely see📦 These “dark warehouses” operate 24/7 with no human workers on-site. Powered by AI, robotics, and advanced automation systems, they can process up to 200,000 parcels per day with incredible speed and precision. ▶️No lights. No breaks. No downtime. From autonomous sorting systems to robotic arms and intelligent routing algorithms, every movement is optimized for efficiency. The result? Faster delivery times, lower operational costs, and a supply chain that’s always on. But this shift raises important questions: ✅What does this mean for the future of warehouse jobs? ✅How will companies balance efficiency with workforce impact? ✅Are we ready for fully autonomous supply chains? One thing is clear: logistics is no longer just about moving goods, it’s about engineering intelligence at scale. The future of warehousing isn’t coming. It’s already here. #Automation #AI #Logistics #SupplyChain #Innovation #FutureOfWork #Robotics

The Shallow Bay revolution: Why 18‑ft clear heights are the new gold. Imagine your warehouse as a chessboard – every square must fit your pieces. A shallow bay space gives you the right board size for medium‑sized pieces. 1. Flexibility is king. The 18‑22 ft ceiling lets you stack, but not overwhelm, creating modular zones for different SKU sizes. 2. Proximity pays. Being near urban hubs cuts last‑mile costs and speeds up e‑commerce deliveries. 3. Cost‑efficiency. Lower clear heights mean lower construction and operating costs compared to high‑rise warehouses. 4. Future‑proofing. As supply chains shrink, businesses crave localized hubs—Shallow Bay fits this shift like a glove. 5. Energy wins. The modest

Most warehouses being designed today are already outdated. I just got back from Mecalux HQ in #Spain. The goal wasn’t a tour.   It was to go deep - inside the systems, watching them run, pulling engineers aside, asking the questions you cannot ask over email. We currently have multiple projects in the automation space, so this was about sharpening how we design and think. Not to learn something new.   To understand it at a deeper level. What I saw: - Stacker cranes (pallet + box)   - Automated pallet shuttles and 3D shuttles   - Trilateral AS/RS systems   - AMRs across pallet and case operations   - High-performance pick stations   - Full conveyor systems   - Vertical lifts and monorail transport  This isn’t 'future'. It’s already running at scale. At Handy Equip, every building we design has to be ready for what our clients will need in 2030 - not just what they need to open the doors next quarter. Years of showing up. Doing the homework. Delivering buildings our clients will still be thanking us for in a decade. Curious what others are seeing - where is the biggest gap right now, layout or systems? #Warehousing #Automation #SupplyChain #ASRS #Logistics