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New York City’s Last-Mile Warehouse Boom Requires New Levels Of Technical Know-How

By Cliff Goldsmith

The coronavirus pandemic changed the way Americans shop, sending consumers online in
droves – a phenomenon that hasn’t fully abated, even as COVID-related restrictions have lifted.

The shift sparked a boom in so-called “last-mile” warehouses that are located in densely
populated areas in an effort to reduce delivery times. My company, Suffolk, is currently building
two of these facilities in the five boroughs – one in Queens, the other in Brooklyn – and we have
conducted estimates for half a dozen others in recent months.

Building last-mile warehouses presents unique challenges. Space is at a premium, so the
traditional sprawling suburban model does not work. That means building up, not out. But
multi-story warehouses are not the norm. In fact, the Queens facility we are building is a first-
of-its-kind undertaking for our client, whose tenant has warehouses all over the nation.

Building in a tightly-packed urban environment requires a different approach that is more
technical and time-consuming than the standard construction in which cranes are used to tilt
up a series of concrete wall panels into a standing position on a concrete slab base. This is both
cost-effective and quick, but not suitable for multi-story structures.

Getting a multi-story warehouse done right requires a degree of sophistication and experience
not necessary for a simpler, single-story building. Technologies such as 4D scheduling and
logistics simulations incorporated into a comprehensive Virtual Design and Construction (VDC)
plan, which are typically used in more complicated residential and commercial projects, for
example, can help streamline the process and keep costs under control.

The same level of technological sophistication is also needed inside these warehouses, which
are extremely advanced compared to their suburban counterparts. A decade ago, a standard
warehouse didn’t have a lot going on inside. It was essentially an empty box in which goods
were stored and vehicles were parked. Today’s warehouses are data-driven hubs that enable
the close tracking of goods to minimize delivery time and maximize customer satisfaction.

And then there’s the delivery fleet itself, which is increasingly going electric. This is especially
true in the case of last-mile facilities located in states like New York, which have set ambitious
clean energy goals.

Governor Kathy Hochul has taken steps to aggressively curb greenhouse gas emissions from the
transportation sector. In the private sector, a variety of companies – from IKEA to FedEx – are
either already employing electric vehicles for last-mile deliveries, or moving toward doing so.

Of course, a fleet of electric delivery trucks requires charging stations, which need to be
accommodated into the design of a warehouse without sacrificing significant space that is
already at a premium.

When working on a higher-complexity project like a technology-filled urban warehouse, there is
very little room for error. The timeline is already slightly longer than a traditional single-story
project, and significant setbacks can lead to cost overruns and delays, which is bad for both
clients and consumers alike. A combination of community, technological savvy, and experience
is critical to the success of a last-mile warehouse.

The unpredictable nature of the COVID-19 virus coupled with the ease of online shopping has
fueled continued growth in e-commerce. Though the market has slowed, experts predict it will
maintain its steady upward climb. That means the demand for last-mile facilities will remain
high. It’s critical that contractors ensure they are stepping up their efforts to be up to the task
of meeting the moment to play a key role in the city’s future growth and economic prosperity.

Cliff Goldsmith is Vice President, Operations at Suffolk Construction.

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