The panel agreed that labor is the most critical piece in the e-commerce process, once transportation is analyzed. “The reduced availability of warehouse labor and rising hourly rates are creating challenges for eCommerce fulfillment operations,” said Ryan Keathley, SVP of Asset Management at GLP. “During site selections, companies are being forced to pay closer attention to the labor component when evaluating locations.”

Regarding how the industrial industry plans to address e-commerce in the future, Spencer summed up the next generation of last mile delivery. “Third-party logistics providers will either lease or own the assets/buildings—inner city, single- or multi-story units from 30,000 to 50,000 feet.” He said these facilities can reposition stores such as buildings that were originally constructed to be pharmacies, former department retailers or even grocery stores. To meet the last mile requirements, these buildings must contain “between one and four dock doors for unloading trucks, air conditioned 15 to 20-foot ceilings, plenty of light and plenty of front parking for loading. The product will already be sorted down to ZIP codes, and they can be placed into the UPS system directly or loaded into delivery vehicles for door delivery.”

Aldrich added, “While large e-commerce requirements driven by labor, proximity to large metro areas and physical building characteristics [clear height, trailer parking, car parking and overall flexibility] will continue, there will be an increased focus on smaller requirements driven by even closer proximity to urban population bases. As consumers' expectations increase, the ultimate goal is to be able to have product on their doorstep as soon as possible once the item is ordered, either from the physical retail store or online for pure play eCommerce.”

DALLAS—In today's ever-changing technological world, transactions executed on a laptop, tablet or smartphone has become commonplace. Taking it to the next level, certain appliances are now capable of signaling that the milk is low in the refrigerator or the ink is empty in the printer, order it and have it shipped that same day without any human intervention.

Commercial transactions conducted electronically—known universally as e-commerce—have been a boom for retailers but has left the industrial commercial real estate industry scrambling to catch up. And if keeping up with US demand is not difficult enough, the handling of imports is even more challenging.

“By 2020 we will have $140 billion of goods coming into the United States,” said Curtis Spencer, president at IMS Worldwide, during an e-commerce panel at RealShare Industrial in Plano, Texas. “This will require 160 new big box distribution centers, 110 sort centers—usually Class B space closer to populated cities—and even more facilities in the more-dense cities to solve the last mile problem for same-day delivery, which is here to stay.”

Instrumental components in addressing the pressing issues is site selection and warehouse requirements. As e-commerce ramps up, more factors are critical to the process. Steve Aldrich, SVP at Hillwood, said the (currently used) model has changing, noting how mega giants such as Amazon and WalMart are transitioning their supply chain from utilizing third-party companies to one that is completely in-house. Regarding warehouse requirements, he explained that inner-city facilities do not have the same height and clearance requirements as the larger e-fullfillment centers. AllianceTexas (Hillwood Properties' industrial arm) addresses e-commerce fulfillment in North Texas in multiple ways.

The panel agreed that labor is the most critical piece in the e-commerce process, once transportation is analyzed. “The reduced availability of warehouse labor and rising hourly rates are creating challenges for eCommerce fulfillment operations,” said Ryan Keathley, SVP of Asset Management at GLP. “During site selections, companies are being forced to pay closer attention to the labor component when evaluating locations.”

Regarding how the industrial industry plans to address e-commerce in the future, Spencer summed up the next generation of last mile delivery. “Third-party logistics providers will either lease or own the assets/buildings—inner city, single- or multi-story units from 30,000 to 50,000 feet.” He said these facilities can reposition stores such as buildings that were originally constructed to be pharmacies, former department retailers or even grocery stores. To meet the last mile requirements, these buildings must contain “between one and four dock doors for unloading trucks, air conditioned 15 to 20-foot ceilings, plenty of light and plenty of front parking for loading. The product will already be sorted down to ZIP codes, and they can be placed into the UPS system directly or loaded into delivery vehicles for door delivery.”

Aldrich added, “While large e-commerce requirements driven by labor, proximity to large metro areas and physical building characteristics [clear height, trailer parking, car parking and overall flexibility] will continue, there will be an increased focus on smaller requirements driven by even closer proximity to urban population bases. As consumers' expectations increase, the ultimate goal is to be able to have product on their doorstep as soon as possible once the item is ordered, either from the physical retail store or online for pure play eCommerce.”