With a higher demand by consumers for ‘next day / same day’ delivery there is likely to be a proliferation of smaller distribution centers in urban settings. Termed nano or micro distribution centers these are much smaller logistic centers that range anywhere from 1,000 sqft (93 sqm) to 10,000 sqft (930 sqm). Fueled by the rapid growth of e-commerce and online sales throughout the Covid-19 pandemic, there is a stronger demand for faster deliveries which is forcing the overall supply chain to find time efficiencies. As such the line between warehouses and distribution centers continues to blur to a more full-service fulfillment center approach especially as autonomous delivery vehicles like Udelv or Eliport start to become more commercially viable.
A research report commissioned by NAOIP Research Foundation found that demand is soaring for smaller light-industrial warehouses of less than 120,000 sqft (11.150 sqm) particularly where they are located close to major population centers (Weikal, S. & Scott, J.R., 2020). Similarly nano-distribution centers (NDCs) which typically covering 600-1,000 square feet (approx. 55 – 93 sqm) are also emerging as a new feature of the industrial and logistics sector in the unrelentless push to be closer to populated areas and therefore to provide the shortest delivery times and best service to customers. For example, New York City-based startup Bond has recently raised an additional $15 million to expand its network of ‘mini warehouses’ to service the ‘last-mile delivery.’
Industrial developers and suppliers of warehouse and logistic space should take note that Autonomous Delivery Vehicles may create a demand for smaller distribution / fulfillment centers near urban settings to meet the increased pressure of next day same day delivery. There may be a trend away from large industrial centers located on the outskirts of town to a more scattered network with more dispersed nodes to leverage the efficiency gains introduced by ADVs.
