E-commerce expansion is fueling the demand for warehouses and distribution center construction in the United States

---

Print Email

---

The increased demand witnessed by the e-commerce industry in 2021 had spilled over to the other industries as well. Construction is no different. In 2021, there had been a rising demand for new facilities, warehouses, and distribution centers. According to ConsTrack360’s Q4 Global Construction Market Survey, the trend is to be continued in 2022, as there has been a strong demand for distribution and warehouse projects in the United States. For instance,

• In March 2022, Amazon is building a US$300 million distribution center in the Town of Niagara. This actually implies the creation of more than 1,000 permanent jobs and seasonal workers who would come to Niagara County.

Notably, Amazon had partnered up with Atlanta-based JB2 Partners to construct a 3.08-million-square-foot facility at 8995 Lockport Road. The project will be using 216 acres of land adjacent to the Niagara Falls International Airport and Niagara Falls Air Reserve Station. This facility would include 55 loading docks, 469 parking spaces for trailers, and 1,755 spaces for cars.

The five-story e-commerce storage and distribution facility would consist of a 650,000 square-foot ground level and four additional floors of 606,750 square feet each. The first floor would consist of a rectangular warehouse of 580,000 square feet. In contrast, upper floors will be mostly occupied with 450,000 square feet of consumer products storage area surrounded by a fence. Notably, the full area will feature offices, a staging area, a receiving area, and a shipping area. Moreover, this site will be designated as a heavy industrial area, making it suitable for storage and distribution, freight-forwarding, and long-distance trucking terminals.

• Similarly, the Kroger Co., an American retail company that operates supermarkets and multi-department stores, is planning to open an Ocado-automated customer fulfillment center (CFC) in Ohio in March 2022. Since the supermarket giant had no physical store in Pennsylvania, the company is introducing this online grocery service for the consumers. 

In May 2018, the Cincinnati-based supermarket giant partnered with British online supermarket Ocado to accelerate the company's development of a seamless omnichannel presence in the United States. The Ocado CFCs and supporting facilities use vertical integration, machine learning, and robotics to fulfill online grocery orders.  

Through this, Kroger planned to expand its reach to a larger geographic footprint, including areas where it does not operate in physical stores. So far, Kroger has opened 17 CFCs, among which three are fully operational. This 270,000-square-foot will serve areas in north-eastern Ohio and Pennsylvania and is expected to create 400 jobs in the region. With Ocado's proven technology, Kroger is likely to achieve the lowest cost-to-serve in the market, combined with the best freshness, accuracy, and service in grocery delivery in the region.

All these facilities are built in close proximity to ports, airports, and trucking facilities to tap the growing warehouse distribution facilities demand. Therefore, the continued growth of e-commerce as the underlying catalyst will fuel the ongoing boom in warehouse and distribution center construction.

To know more and gain a deeper understanding of the construction industry in the United States, click here.