In single-operator distribution centres or on state-of-the-art campuses, today's warehouse operations integrate complex materials-handling software and hardware into bigger buildings than ever before. They take advantage of better transport links and cheaper land on the rims of major cities, say logistics industry observers, to consolidate the work of several more traditional warehouse networks into single operations.
Colliers International's Sydney-based general manager of industrial property, Malcom Tyson, says warehouse buildings have grown from "sheds" of 10,000 to 15,000 square metres in middle-ring suburbs 10 years ago, to between 30,000 and 40,000 square metres today.
"Companies used to come to us just looking for a shed," he says. "Now they identify their requirements, develop their internal design to suit and then determine the size of the shed required. The cost of the internal fit-out is often more expensive than the shed."
Michael Fenton, Parramatta-based regional director industrial and logistics services at CB Richard Ellis, says the trend to fewer centres per operator is creating "mega facilities" exceeding 50,000 square metres, and campus-style distribution complexes of five or more buildings totalling more than 100,000 square metres.
Sydney-based John Hallett, of consultancy Henderson Logistics, which designs distribution centres from the ground up, says these huge centres fit more than ever into each square metre, thanks to how they use the space - and because fire and sprinkler system regulations allow roof heights up to 12 metres rather than the six to eight metres of the past.
He says the industry has moved from the order-picking lists of 15 years ago to use of barcode scanning guns, picking by light emission, and even voice-picking systems.
"Inside, on the hardware side you find better materials-handling and conveyor equipment, higher density storage and layouts, automatic computer-controlled order-picking along narrow aisles, and 'double-deep' stacking," he says.
"Control of this is highly dependent on information technology, and there is stiff competition in warehousing IT software as well as hardware."
A survey of the available technologies reveals specialist companies offering pallet stacking and multi-tiered small-parts storage systems, even drive-in racking systems designed to make better use of the higher roofs.
Radio-controlled stacker cranes can place or retrieve pallets at almost any height, reducing or even eliminating the cost of running a forklift fleet for such applications.
Suppliers claim the technology can be used in conditions of high heat and humidity or in frozen food warehouses at minus 30 degrees.
Another key trend has been towards "cross-docking", says Hallett, bypassing the stacks altogether by simply bringing containers to large receiving areas and unpacking them directly into trucks for final distribution.
"This is a trend particularly when goods are to be redistributed to major retail outlets, in the rag trade, in which a lot of imported clothing, for example, goes in bulk to stores.
"It's not quite a reality yet, but there are inklings of future systems where the containers, particularly of imports, are 'pre-picked' before shipping and unpacked directly into the trucks at the port."
The larger spaces, and companies' overwhelming preference to lease rather than buy warehouse space, means businesses operating their own warehouses are increasingly contracting out to suppliers who operate distribution centres for several clients under one roof.
Hallett says it's not only the major supply chain operators such as DHL, Toll Holdings or Linfox doing this, but also mid-sized operators such as international freight-forwarder Schenker. But it's not universal, and food company Sanitarium still runs its own distribution, he says, while Arnotts and Goodman Fielder contract theirs out.
Fenton, meanwhile, says there has been another trend, driven by greater institutional ownership base of industrial property in Australia: increasing sophistication in the development of industrial facilities.
"Particularly, we are seeing the inclusion of green initiatives, including grey water recycling, roof water harvesting, native vegetation, natural ventilation and low energy lighting," he says.
Malcom Tyson also concedes that while infrastructure and technology improvements enable the drift outwards to ever-larger warehouse operations, the operators who turn over their stock more often are still better placed in Sydney's middle-ring locations - Artarmon, Silverwater, Rydalmere or Botany, for example.
"It's still a long way from the west to the inner retail hubs," he says, citing brewer Foster's as a good example. Its distribution centre is at Rosehill, just east of the mid-west suburb of Parramatta.
"What's more," Tyson says, "while warehousing operations are being moved out, the office components of businesses are kept separate, closer to the metropolitan area, so that they remain attractive to the white-collar workforce."
Fairfax Business Media