While highly creative technology and interesting dinner conversation, will these new developments really have an impact on commercial real estate? For simplicity, let’s not get into the specifics of how it actually works, as most of us in the CRE industry are not engineers or physici
sts for that matter.
It is important to note that up to this point, the industry has primarily focused on long distance, rural transportation and delivery routes with little traffic. Under such a scenario, technology could help drivers take a nap and get energized for a long day ahead driving through high traffic areas. Long haulers could achieve increasing returns on deliveries, allowing product to arrive sooner.
Delivery service companies such as UPS and DHL are also looking into using similar technology. Details are still being worked through, but with the shortage of drivers for both short and long distances, the concept could seemingly help lower personnel costs and allow for increased efficiencies with on-demand delivery. This might also have the pote
ntial to spur manufacturing with closer proximity to the inventory, changing the makeup of industrial areas overnight.
In the industrial real estate market, this could also have effects on warehousing, locations and design. As the technology is used in longer stretches of road in more unpopulated areas, industrial real estate may need to be strategically located to these more rural areas away from high-traffic. The design of industrial real estate would also need to accommodate more technologically advanced trucking companies and drivers, enabling automatic off or on-loading of products, and other automation.
If driverless vehicles do take hold, we are likely see an increase in the use of trucks, as approximately one-third of the estimated $700 billion industry goes to driver salaries. That is of course, if the trucks become fully autonomous without a driver in place. That scenario is much farther down the road, no pun intended, but it is a possibility.
Another concept in development is a platooning technology that will allow trucks to follow each other closely, within 30 feet, down the road, synchronizing their movements together which could save on fuel costs and improve safety. This technology has already b
een tested and used in Europe on the open road. Platooning could increase the loads simultaneously delivered to industrial real estate sites, also requiring changes in design and possibly location.
The introduction of this technology will certainly affect the industrial real estate landscape, but it may be too soon to really understand the full scope of the changes. For industrial real estate professionals though, keeping these changes in the forefront of our mind will keep us a step ahead of our competitors.