fulfillment center construction

How Contractors Deliver When Building E-Commerce Fulfillment Centers

The highly complex nature of e-commerce requires facilities that are constructed with the same sort of pinpoint efficiency and flexibility as the industry they serve
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Wherever you are in the world, you’ve likely been on the receiving end of Seth Weisberg’s work. That is, if you’ve ever shopped online and received a package delivered to your door. 

Those packages don’t materialize out of thin air. They likely start at one of a growing breed of building types now prominent across the world: fulfillment centers, the facilities that store and distribute the millions of online orders made every day.

Designing warehouse space and handling processes for fulfillment systems across the US for ABCO Systems, Weisberg and his team are responsible for making sure that all kinds of products—from fashion to food items—make their way safely to consumers’ homes.

What kind of construction goes into creating fulfillment centers? Built sat down with Weisberg to find out.

Reimagining fulfillment centers

Like so many contemporary business practices, Weisberg said that e-commerce giant Amazon paved the way for an expanded modern logistics industry, explaining the business “was a niche many, many years ago,” until “Amazon really changed the culture of the distribution world.”

In 1997, Amazon began building its global distribution network, starting with a 93,000-square-foot fulfillment center in Seattle, near the company’s headquarters. At the time, Weisberg said these spaces were considered cost centers. “People were trying to build out their distribution centers ultimately for as cheap as they possibly could, which is understandable,” he said.

Amazon took a different approach. “Amazon and Jeff Bezos [the company’s founder and chairman] really focused on building out their distribution centers because they realized that sometimes spending more money in the long run can be extremely beneficial,” Weisberg said. “Amazon didn’t make a lot of money for a long time because they kept investing in the business,” by building an extensive—and expensive—distribution network.

Once Amazon’s fulfillment model began to take off, Weisberg said it was a game-changer. “People began to realize that if they’re being thoughtful and putting a lot of time and energy into their spaces, they are very likely going to be a better run business and save money in the long run.”

Weisberg believes the best way to do this is to draw on the expertise of fulfillment experts, who can create more expensive—but more effective—solutions that save money over time.

“For example, if you’re shipping 10,000 items a day and it costs you $2 to ship an item, if you put enough automation or methodology in, it could reduce the cost by half, saving $10,000 a day. In the right application that saves an enormous amount of money over the duration of time. So there is quite an argument to build the distribution center in the proper way.”

Turning warehouses into workspaces

But what does it mean to build a distribution center the proper way? For Weisberg, it all starts with the space.

“Typically, our customers will already have the space,” he said, although occasionally the ABCO team has worked with customers needing distribution spaces. Such buildings used to be located primarily on the coasts before a recent boom in fulfillment center construction in the Midwest, where facilities are significantly cheaper to operate, Weisberg said.

When a new project begins, Weisberg said the ABCO team will go see the warehouse space and begin the planning process. “We work with the customer to research their products, determining which products move faster or slower,” he said. “We look at their data and learn how much bulk storage they need. We will determine how many products move through their facility on a daily basis, and ultimately design systems based on the data that is provided to us by the end-user.”

Once the space has been located, “we build the actual distribution methodology inside,” Weisberg said. “The conveyor systems, the sortation systems—that’s the type of thing that we build. And the way we approach each project is highly dependent on our customers. Depending on where our customers are moving, or where new customers are, we are building with them.”

There are no established systems, Weisberg said. Each new project must be created from scratch. “It is very much a puzzle, which depends largely on each individual’s distribution model,” he said. “Our approach is very bespoke, and every system is different. We are a systems integrator, which means that we use a lot of different manufacturers, putting products together to work specifically for a customer. Based on the research that we do with our customers, we will learn how they should be operated and we can help them determine the best way to set up their facilities.”

Creating expandable spaces

Because the world of logistics is constantly in flux, Weisberg said that much of ABCO Systems’ work involves a flexible approach to space.

“We do a lot of greenfield buildings, which is essentially an open space building where somebody is just moving into the building,” he said. “But the vast majority of our work is what’s referred to as a brownfield building, where the building is an existing, already-in-use distribution center, but the distribution requirements and/or the storage requirements have been changed for whatever reason.”

Many companies find it easier to move into established spaces, at which point Weisberg and the ABCO team can help them adapt the existing systems to meet their needs.

“We go in and we make all sorts of different types of changes,” he said. “Many of our clients are third-party logistics companies with dozens or potentially even hundreds of different customers. And all of their customers are going to have different requirements. Some of them have different packing paper; some of them have different styles of boxes; some of them just have different requirements in many different ways.”

With third-party logistics contracts rarely lasting longer than three years, Weisberg said his team has to create adaptable systems that can meet changing client need.

Then there’s the matter of local regulations. “Pretty much every job we do is challenging, because everything is very site specific,” Weisberg said. “Each geographic location has different seismic requirements, and everything needs to be engineered specifically to ensure that if there is a fire, the building is properly protected, that there’s a proper path of egress. Calculations are done to confirm that the structure can easily hold onto and remain safe so that it won’t collapse based on a potential seismic event. We have to plan for the worst-case scenarios. As much as creating an efficient distribution system is important, it’s even more important to create a safe environment.”

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