Five years ago, Prologis Research predicted that “warehouse automation would increase in response to the need for efficient buildings.”
These days, while automation adoption is increasing (and reinforcing the demand for well-located warehouse and logistics space), it hasn’t reduced the need for space.
Rather, “automation is growing alongside logistics real estate footprints, with technological advances achieving top-revenue growth and solving operational constraints,” according to a recent Prologis write-up.
However, while there has been progress in automation adaptation, “the runway is long,” said Melinda McLaughlin, senior vice president, global head of research at Prologis.
She told Connect CRE that as technologies become more accessible and practical for deployment across facilities, “further adoption is expected, as users look to increase speed, accuracy and throughput.”
But that adaptation won’t necessarily require less square footage.
Automation Types
The write-up listed several automation systems, including the following.
Fixed automated storage and retrieval systems
Storage, retrieval and internal materials movement are handled by automated equipment and software. This includes the use of cranes, shuttles, lifts or cubes. Warehouse specs include 32-foot-plus clear height, column spacing, flat floors and a mezzanine.
Automated guided vehicles/autonomous mobile robots
“AGVs and AMRs take over repetitive transport tasks, such as moving inventory between storage, picking and packing areas within a warehouse, reducing travel time and improving throughput,” McLaughlin explained.
Warehouse specs include 25-35-foot clear heights, flat floors, mezzanines and column spacing.
Conveyance/Sortation
This focuses on technology to improve warehouse operational productivity, including speed, safety and efficiency. Warehouse specs are flexible.
“These systems enable high volumes of cartons or parcels to move through a warehouse quickly and consistently, improving speed and routing accuracy,” McLaughlin said.
Picking/Piece-Handling
Automation that uses robotic arms to palletize, unload and fill cartons. The warehouse species for this technology are also flexible.
Upsides and Downsides
The report said that the technology is being adapted due to labor shortages, increasing supply chain complexities and faster throughput demands. Furthermore, automation advantages can:
- Improve service levels and expand networks
- Boost expansion within infill areas
- Generate value for users and owners
On the other hand, the technology comes with challenges.
“Barriers to implementation often come down to cost, flexibility and building readiness,” McLaughlin explained. For example, fully automated systems require significant, upfront capital investment and are less adaptable if operational requirements change.
“They can also require specialized facilities, which means not every building is compatible,” McLaughlin added.
The best way to mitigate some of the problems is through a phased approach that starts with modular technologies or partial automation solutions. McLaughlin said that this strategy could help reduce capital expenses and the workforce needed to operate fully automated warehouses.
The Automation-CRE Connection
Space compression isn’t the goal of technology adaptation. According to McLaughlin, automation should be considered a complement to real estate rather than a strategy to reduce square footage.
In fact, today’s tenants are gravitating toward automated modular solutions that can be adapted to existing buildings.
Furthermore, “the sector is shifting toward adaptable, tech-enabled warehouses that solve labor and throughput restraints, while supporting long-term network growth,” she added. “This makes real estate and automation increasingly interdependent.”
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