New Technology Will Modernize Supply Chains, CBRE Says

Recent technological advancements could have dramatic impacts on distribution strategies and configuration of supply chains, according to a new report from CBRE. Namely, autonomous trucking, 3D printing and warehouse automation will have widespread effects and will be in regular use by 2025.

“With the gains in technology with respect to the supply chain, companies will be able to reduce overall supply chain cost in the long run,” says CBRE Portland VP of industrial and logistics brokerage services Cara Nolan. “We believe this could bring around a change in the demand in the industrial real estate market—moving companies to fewer warehouses, but increasing those warehouses' total size and requiring modern IT infrastructure and clear heights to accommodate robot picking systems and mezzanines.”

Incorporating autonomous vehicles into the supply chain could give companies more of a leg up than just the inherent labor savings. Truck drivers in the US are limited to driving 70 hours a week or 3,000 miles, and taking these limitations out of the equation means distribution could take place over greater distances, in less time and at lower costs. Manufacturing companies may be able to operate from more remote locations, where land is less expensive.

“Autonomous vehicles, 3D printing and warehouse automation stand to reshape supply chains on an unprecedented scale, but real estate won’t be innovated out of that equation,” CBRE head of industrial and logistics research David Egan says. “While use of autonomous vehicles in shipping likely will allow for a greater emphasis on a few massive distribution centers in far-flung, less expensive locations, 3D printing meanwhile will result in many users needing more industrial space closer to customers to facilitate on-demand, custom manufacturing.”

3D printing will change the demand for raw products. The ability to manufacture items on-demand brings with it a need for storage of bulk, raw materials in last-mile distribution facilities.

“The combination of the burgeoning growth of e-commerce and the mainstream emergence of these technological advances has ushered in a far-reaching evolution of the physical supply chain,” said CBRE’s executive managing director of industrial and logistics, Scott Marshal. “Proactive industrial investors and users are adapting to these changes now to capitalize on this new era of modern site selection and supply-chain design.”