The construction of warehouses has slowed in recent years, leading to a lack of new ‘green’ sheds. However, as Ben Cooper discovers, plenty can be done to get existing warehouses up to scratch.
One of the hangovers from a period of relative inactivity in warehouse development is that the construction of new environmentally friendly sheds is largely on hold. Designs sit gathering dust, waiting for investment and occupier activity to take them off the shelves.
But while large-scale development still looks a long way off, there are still those that have grasped the opportunity despite the lack of new space, and innovations are taking place every day. So what is driving the agenda in 2013 and beyond, and how can retailers improve their sustainable credentials before the next generation of green sheds starts coming out of the ground?
There was a time when the green agenda seemed more like a public relations routine carried out by investors, developers and occupiers than something with real meaning behind it.
And even where there was a genuine concern to go green, the fear of spiralling costs without proper returns would often scupper the plans. But in the last decade or so, things have begun to change.
Savills building consultancy team project manager James Kelway says: “Sustainability used to be kicked around at the end of a meeting and nobody would pick it up, but in the last few years it’s come right up the agenda. Six or eight years ago the question from developers used to be ‘if I’m going to make my building greener what’s my payback period?’ The bang for buck is less important now.”
But just when developers, retailers and third-party logistics providers were really starting to wake up to sustainability years ago, the big crash came. Progress was halted in all areas of development. If anything, warehousing suffered the most severe drop-off of all.
Colliers International senior sustainability advisor David Eynon says: “We’re in the rehab phase at the moment.
There’s hardly been anything built and the issue has been parked. But the green agenda does exist. It’s certainly on the agenda on new facilities.”
But new facilities make up a tiny fraction of the warehousing out there, given how little has been built in the past five years. If retail is going to become greener as an industry, existing buildings have to be improved as well.
Balancing consumer demands
There are already signs, partly driven by an inability to find new space, that retailers are improving their existing distribution centres and logistics chains.
Turner & Townsend principal consultant Chris Spicer says: “Investing in making existing distribution centres more sustainable is a sensible strategy and provides a return on investment.
“Electricity and fuel are the two big contributors to carbon footprint. If [retailers] can reduce those two they have a fairly positive impact on their overall emissions.”
Retailers have had to react to a heightened awareness of energy consumption, carbon footprints and climate change among the public, who now demand to know how goods end up in their bags.
Segro technical sustainability manager Terry Clarke says: “UK retail is very competitive. Retailers like Marks & Spencer have that philosophy and those policies because the customers that come into their shops want to know they are being as sustainable as they can possibly be.”
The way people shop is putting a great deal of pressure on retailers and changing the logistics business. Spicer says: “Consumers are looking for carbon reduction and looking for things to be greener, but on the other hand we’re all being more demanding. Fashion retailers are offering 90-minute deliveries. There is a competitive element.
Retailers have to promote their green products, but there isn’t a premium on those products.”
This dichotomy lies at the heart of the logistics equation. Shoppers want to see green measures from retailers, but the ecommerce generation wants convenience and speed of delivery.
But Prologis UK sustainability officer Simon Cox believes this is the logistics opportunity of a generation, because of the increasing emphasis on warehousing in home delivery and click-and-collect. He says: “Multichannel has brought logistics and warehouses closer to the business, and it has given them a new way of saving money.
“Warehouses are very energy-efficient buildings. For a retailer it’s far easier to have an energy-efficient warehouse than a store.”
As the economy shows early signs of recovery, warehouse development should start to creep back. And with retailers in the driving seat, green sheds and their financial benefits will be here to stay.
How can retailers make their existing warehouses greener?
Mat Lown, partner at Tuffin Ferraby Taylor, has these tips:
- Lighting is usually the most important energy load for most logistical sheds and can be reduced through using T5 lamps or LEDs and effective control systems, including infra-red sensors for switching lighting on and off, and timers. Further energy saving can be made by maximising use of natural light, including high transparency and/or UV resistant glazing and rooflights.
- Sub-metering of all major energy use and any separate warehouse and office areas is key to operational energy monitoring, isolating power loads and identifying poorly performing equipment. Data should be collected 24/7 and should form part of a regular energy audit for continual improvement.
- Heating loads are generally relatively low for warehouses where storage predominates. However, warehouses arenotoriously poorly insulated. Improved levels of roof and wall thermal insulation should be incorporated, and potentially a green roof.
- Pay particular attention to the thermal efficiency of loading bay doors while taking account of operational requirements; use draft lobbies and insulate between conditioned office areas and non-heated warehouses.
- Aim for natural ventilation, but if heating and cooling is needed, use as efficient systems as possible and consider the feasibility of combined heat and power.
- Examine water efficiency through rainwater reuse and maximisationof waste recycling.
- Personnel training is an often overlooked but critical component to sustainable logistical operations and ensures any sustainable features and technologies are optimised.
Focus on Marks & Spencer’s greener logistics
To see proof of how much a green logistics operation can save a retailer, you only need to look as far as Marks & Spencer’s ambitious Plan A.
Launched in 2007, Plan A is designed partly to transform M&S’s logistics footprint by reducing the number of warehouses the retailer requires and making the few it keeps as up to date as possible.
M&S head of Property Plan A ManeshDutta says there are relatively simple wins for retailers, and quick returns: “It’s about understanding where the wastage is occurring. Often water wastage is down to leakage, and energy is down to having the wrong type of lighting in your warehouse. You also need to engage your users to make sure they are operating properly. The payback is really short on retrofitting existing warehouses with sustainable technology.
“That will be better for everyone and there’s a commercial reason why; if we club together then it will become minimum standard. We share information because we’d like everyone to do this.”
Already that payback is speaking for itself. Dutta says since Plan A was launched M&S has benefited to the tune of £135m in savings and new forms of revenue, and saved £70m in energy bills by being more energy efficient.
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