corporate taxation rates. These advantages
end up trumping administration issues
at the borders, which have been greatly
streamlined in recent years by the Free and
Secure Trade (FAST) program.
2. INCREASING AUTOMATION AND
THE TALENT GAP
Advances in technology and changes in
the work force are also having a large
effect on how companies shape their distribution network and design their DCs.
Automation on the manufacturing and
warehouse floor is a well-established trend.
Foxconn, for example, has already automated an entire factory in China and eliminated some 60,000 jobs. Meanwhile, “lights
out” warehousing technology continues
to advance, with key players like Amazon
Robotics (formerly Kiva Systems) at the
forefront. The International Federation of
Robotics (IFR) reports that sales of industrial robots achieved an all-time record of
248,000 units in 2015, up 12 percent from
the previous year. This trend will only
intensify as robotic technology continues
to advance, replacing not just blue-collar
jobs but white-collar ones as well.
In terms of site selection, the trend
toward automation means that companies
are looking at whether a prospective site has high-speed
fiber and sophisticated telecommunications infrastructure.
In addition, it will become increasingly important that a
site be able to provide continuity of operations and be
insulated from natural and human-induced disasters. These
are factors that in the past were more commonly linked
to our data-center site-selection projects than to distribution centers. But DC relocations will increasingly need to
consider energy costs and the reliability of the grid due
to the growing use of automation, the cloud, and robotic
applications.
Similarly, one of the biggest challenges facing our
site-seeking supply chain clients is finding skilled labor to
assemble and run the high-tech tracking and material han-
is increasingly high-tech, and as a result, it confronts many
of the same problems in recruiting skilled workers that
advanced manufacturing companies in fields like aerospace
and medical technology do.
In many markets, the available work force is not properly trained, so our clients need to do their own in-house
training. Site searches for new warehouses or distribution
centers, then, should include a thorough examination of
state work-force training programs and of local academic
programs in logistics that can provide support for training,
continuing education, and recruiting.
Some of the top logistics schools we have worked
with recently include Northeastern University, Lehigh
University, and Rensselaer Polytechnic Institute in the
Northeast; Georgia Tech and the University of Tennessee
in the Southeast; Purdue and the University of North Texas
in the Central region; and University of California, Irvine,
University of California, Berkeley, and the University of
Washington (Seattle) in the West. States with some of the
best work-force training programs include Georgia, South
Carolina, Louisiana, Nevada, and Ohio.
3. LAST-MILE DELIVERY AND STORAGE LOCKERS
Probably the most dynamic link in the supply chain in
recent years has been the “last mile”: the movement of
goods from a DC to a final destination in the home.
E-commerce king Amazon has done much to challenge and
ultimately rewrite the rules of last-mile delivery. Last-mile
delivery has also produced a new warehousing subsector:
the locker. Studies show that online shoppers not only want
their packages now but also want their packages delivered to
places other than their homes. These lockers can be viewed
as “micro warehouses” and will come with additional costs.
We expect many to be operated by an emerging sector of
third-party logistics service providers (3PLs) specializing in
this particular segment of the supply chain.
Lockers are now common in Europe, where densely populated and congested urban centers make them a natural fit.
We expect that lockers will become the next boom sector
within logistics/distribution site selection in the United
States. Amazon already has automated lockers in six states,
while the U.S. Postal Service has lockers located within post
offices in the Washington, D.C., area.
Upstart third-party logistics service providers will be
looking for sites where they can locate lockers, such as in
transit centers, apartment buildings, convenience stores, or
any establishment that provides off-hours access for picking up packages. Also, the growing online meals industry is
expected to fuel the need for temperature-controlled lockers for the delivery of perishables.
