International Transportation | Collection 2021 6 STRATEGIES Logistics Ramp up warehouses Drive-in warehouse, Multistory drive-in warehouse, Distribution logistics, Infrastructure Last mile deliveries have become more and more difficult, especially in densely populated areas. Tangible solutions to this dilemma have been scarce. Ramp up warehouses that have been used in Asia for many years, might be a solution for Europe as well. Despite some first examples, skepticism seems to prevail. However, with the lack of space in big agglomerations as well as the changing consumption and shopping preferences of customers, this might soon change. Armin F. Schwolgin I n large urban areas last mile logistics has become more and more challenging. Presently, e-commerce customers are serviced from distribution centers located outside urban centers. Consequently, true armadas of vans (sprinters) and light trucks (3.5 tons up to 7.5 tons) operated by parcel and forwarding companies are flooding the cities every morning. On their way they are using the same infrastructure as passenger cars, busses, and trams, creating traffic jams and external effects. One of the main drivers of growth in urban freight traffic has been the boom of e-commerce, with Covid-19 fueling online business even further. It is believed that customer behavior will not return to offline business once the pandemic is over. To reduce the cost of last mile logistics, whilst improving the service level for the customers, new solutions for the last mile are needed, but these seem to be scarce [1]. Given the continuing and growing demand for online services, we will explore the possibility of building a new type of warehouse, often called a (referred to as a) multistory, on empty lots in or close to the middle of urban centers. Recent publications in Germany have centered more on the additional cost of these warehouses and legal restrictions (building codes) rather than on optimizing the usage of land and reducing the sealing of soil [2]. Terminology and historic examples The term “multilevel warehouse” is somewhat misleading because the adjective multilevel is not sufficient to differentiate this type of warehouse from existing high-rise warehouses that use either high rack technology or freight elevators [3]. In Asia, especially in Japan, Hong Kong, Singapore, and more recently in the People’s Republic of China, logistics companies have been using multistory warehouses where the different levels can be reached by vans, regular-sized or even large trucks carrying forty-foot containers (figure 1). Among the existing words the term “ramp up warehouse” seems more appropriate, although structures of this type sometimes have an upward and a downward ramp. In other cases, a wider ramp with two lanes allows for two-way traffic. The ramp is usually made of reinforced concrete which is supported by columns. In this article, we define a ramp up warehouse as a multistory warehouse with sturdy ceilings in between featuring a high load-bearing capacity, and allowing light as well as heavy trucks to drive in and out via ramps. These can be straight or spiraled. In Asia, we find ramp up warehouses that are also equipped with container elevators. Sometimes ramp up warehouses are regarded as an innovation. However, looking at agricultural buildings of the past, you might conclude that there is nothing new under the sun. The upper level of European farmhouses or barns could be reached directly from the hillside, via an artificial dam, or indeed by way of wooden ramps. While the farmhouses in the Black Forest, in Saxony, Thuringia, Austria, and Switzerland allowed the horse-drawn wagons to turn around on the upper floor of the barn in the farmhouse (figure 2), the so-called “drive-up barns” in the northeast of Germany required two ramps, just like some of the modern ramp up warehouses (figures 3 and 4). At the time and even now, the advantage of a more rapid storing process was and is most likely offset by the higher construction cost [4]. The drive-up double barn described by Reich in 1928 is quite remarkable [5]. Four sturdy horses pulled the farm wagons up the ramp made of an earth dam and wooden posts. Once the wagon was in the barn, the bundles of grain or hay could be easily and very quickly unloaded by dropping them onto the lower level or depositing them sideways. The ground floor has a support Figure 1: Ramp up warehouse at Beijing Capital International Airport Photo: Schwolgin Figure 2: Inside a historic ramp up farmhouse in the Black Forest Photo: Schwarzwälder Freilichtmuseum Vogtsbauernhof International Transportation | Collection 2021 7 Logistics STRATEGIES grid in the middle of about 6.5 × 6.5 m, considering the load of a harvest wagon (3,000-kg), the dead weight of the vehicle (approximately 1,000 kg), and the weight of the four horses (roughly 2,600 to 3,000 kg). A similar wooden barn, probably built in the 1920s, still exists today in northeast Germany. Ramp up warehouses in Asia Looking at ramp up warehouses in Asia, we can find different types that have been built in the past 25 years. The most prominent types are those having 20 or even more floors with spiraled ramps. These could be considered real high-rise warehouses. A subset of these have additional freight elevators for containers, some of them are equipped with container elevators only. Despite the additional cost for ramps (space, construction), the drive-in version appears to be the prevailing form; in some cases, the original container elevators have been replaced by ramps if additional space was available. The main reasons for this development are the costs for servicing the elevators, electricity, and the waiting time for the trucks to load and unload the containers. The third type is a twoor three-story warehouse with separate upward and downward ramps with a relatively flat slope. This type of multistory drive-in warehouse can be found in big cities in Mainland China, the USA and, most recently, also in Europe. The Kerry Cargo Centre in Hong Kong’s Kwai Chung district has a truck ramp servicing 20 floors [6]. It is one of the largest warehouses of this type in the city (figure 5). Each floor has an overhead clearance of 5,20- m. The load-bearing capacity of the ceilings is 350 pounds per square foot. This design allows to store airfreight pallets three meters high or 45-foot-high cube containers without any problems. Lifting platforms allow for the direct transfer of loads from the truck to the warehouse. The location in Kwai Chung is ideal for seaand airfreight as well as road transport. The outlay of the ramp up warehouse consists of the spiraled bi-directional ramp, a loading area with large shunting areas and, of course, the storage space as such. Parking and puffer areas are also available (figure 6). Further room is reserved for offices and breakand washrooms, meeting rooms, surveillance, and security installations as well as fire protection. Alternatively or additionally, container elevators can be found in these high-rise warehouses. In contrast to the typical cargo elevator in traditional multistory warehouses where goods are moved either manually or by forklifts into the elevator cabin, the container elevator is considerably larger and does need an extra cabin as the container itself serves as a cabin (figure 7). The container is moved in and out automatically by cantilever beams with twist locks positioned below the lifting gear. This allows for the horizontal shifting (figure 8). After having been placed onto the warehouse floor to the right or left, the stuffing or stripping of the containers can be done in the conventional way. In general, the availability of land in the P. R. of China is not a bottleneck. However, in the huge first-tier cities, this can constitute a problem. For the Olympic Games in Beijing in 2008, four ramp up warehouses with three floors each were built close to the Beijing Capital International Airport (figure-9). There are separate upward and downward ramps, so trucks do not have to pass each other. The warehouses were provided to the International Olympic Committee and are now being used commercially. Examples of ramp up warehouses outside Asia About five years ago, the concept of ramp up warehouse started to spread from Asia to the USA, Great Britain, France and finally to Germany, driven by logistics real estate developers. In the USA, the first ramp up warehouse was built in 2016 [7]. It has a total surface of 54,000 m 2 spread out across three floors. The first two floors (including the ground floor) are accessible by trucks, the third floor is connected by freight elevators. The ceilings are reinforced so that they can carry the weight of racks and materials handling equipment as well as the weight of vans and trucks. The construction was completed in 2018 and has been rented out to Amazon. Further objects are being analyzed in New York, Los Angeles, and the greater San Francisco area [8]. In early 2018, Segro announced the building of a multistory warehouse for Ikea in Paris (Port de Gennevilliers). Drivers of this project were the availability of suitable Figure 3: Upward and downward ramp of a barn in former East Prussia Source [5] Figure 4: Ramp of a drive-through barn in Alt-Guthendorf / Mecklenburg Vorpommern (Germany) Source: http: / / gutshof-alt-guthendorf.de Figure 5: Multistory warehouse with spiral truck ramp in Hong Kong Source: Kerry Logistics Figure 6: Typical floor plan of a ramp up warehouse in Hong Kong Source: Kerry Logistics International Transportation | Collection 2021 8 STRATEGIES Logistics properties and the dense population. This ramp up warehouse has a total floor space of 63,000 m 2 . It provides 48 docking stations for trucks on the ground floor and 25 on the second floor. The ramp is 10 meters wide, allowing trucks driving upward and downward to easily pass. In addition, there are 85 loading stations for electric vehicles for the last mile distribution process in the center of town and the western suburbs [9]. Several months later, Chetwoods Associates Services Ltd. announced the first-time construction of a three-story warehouse in the UK ([10], see figure 10). Once again, the drivers were the lack of suitable land and the “on-demand economy”. It is remarkable that all three levels with a total surface of 426,000 square feet (39,575 m 2 ) can be reached by motor vehicles. On each level there are 26 loading docks and four entry doors. In addition, there also is a parking garage with charging stations for electric cars. First examples of ramp up warehouses can also be found in Germany. In 2018, developer Segro started building the first multilevel warehouse in Munich-Daglfing [11]. The building has two levels with a total surface of 16,000 m 2 , which are accessible by motor vehicles up to five tons, excluding regular trucks. An inside ramp helps to avoid problems with ice and snow. Meanwhile, Amazon uses this warehouse to distribute parcels and fresh food in downtown Munich using a fleet of vans. In the third quarter of 2021, the twostory commercial and logistics center known as Four Parx Hamburg will be completed. The ramp allows 45 t trucks to drive up and down heated ramps. The facility has a warehouse space of 102,000 m 2 with a warehouse height of 10 m under beam (figure 11). Four Parx claims that this is Germany’s first two-story logistics property [12], meaning it is accessible by heavy trucks. A first evaluation Due to high construction and operating expenses, ramp up warehouses of 5 to 25 floors seem rather unlikely in Europe’s urban areas, mostly because land prices have not (yet) reached a high enough level to justify the extra cost. One of the main drivers of this type of warehouse is the lack of land in urban areas, especially in densely populated areas. Due to the containerization in logistics, multi-storage warehouses using freight elevators seem more feasible in intralogistics. Ramp up warehouses with two or three stories could have a good chance in distribution logistics in large European agglomerations because the land for this type of build- Figure 7: View into the elevator shaft with the storage area to the right Photo: Schwolgin Figure 8: Container put down by a cantilever beam to the left of the shaft Photo: Schwolgin Figure 9: Three story ramp up warehouse at Beijing Capital International Airport Photo: Schwolgin Figure 10: London ramp up warehouse with three levels accessible by-vehicles Source: Chetwoods Figure 11: Truck ramp and warehouse of Four Parx Hamburg in December 2020 Photo: E. Rohland International Transportation | Collection 2021 9 Logistics STRATEGIES ing has become scarce and relatively expensive. This concept multiplies the usable commercial space, which could lead to a higher density of construction. A limitation of sealed land could be a selling point to the public. On the other hand, the negative external effects (emissions, noise, vibrations) will lead to opposition from people living in these areas. The usage of electric and other environmentally-friendly and automatic transport vehicles for the last mile could reduce emissions of gases, particles, and noise. In addition to the cost of land prices, the shopping and consumption preferences of consumers (e-commerce, fresh logistics, same-day delivery, two-hour delivery, one-hour delivery) are further drivers. In the end, the cost savings from lower land usage will be compensated by the extra space needed for ramps. Logistic real estate companies point out that the separate truck access for every floor increases the marketability of the building [13]. Experience has shown that a ramp up warehouse becomes feasible if the property costs exceed more than 50 % of the total investment. Currently, property costs of more than 500 EUR per m 2 seem to be a threshold [14]. Operators should also look at the process costs of inbound logistics, storage, and outbound logistics. The lack of uninterrupted staging areas (inbound and outbound) could cause operational problems. This might be of particular importance on the ground floor where a support grid of 12 × 12 m is required, necessitating a load capacity of 3 to 3.5 metric tons/ m 2 [14]. Depending on the type of ramp in use, some other technical issues must be considered [15]. Among them are the radius of the curves, the maximum slope, and the transition area between the sloped ramp and the floor of the warehouse. In the case of spiraled ramps, the overhead clearance is an important factor. The technical specifics of the trucks using the ramp, must also be observed if semi-trailers are supposed to use the ramp (kink angle between truck and trailer). Outlook Although project managers have been pushing ramp up warehouses in recent years, the acceptance from industry is gaining momentum only slowly. Logistics companies still opt for predominantly horizontal organizational processes and structures. Nevertheless, logistics managers should look at the chances and risks in a more comprehensive way (figure-12). A study from 2016 concluded that multistory warehouses will eventually become more common in Germany as well. In a follow-up study conducted in 2019, the concept was only ranked in the middle range of importance. One reason for reluctance to this effect is the small number of reference projects [16]. Another study pointed out that logistics facilities are generating lower emissions at night whilst facilitating urban condensation will support the idea of multilevel warehouses in the future [17]. If we disregard a certain euphoria that emerged some five years ago, mainly pushed by developers, we believe that the ramp up warehouse will remain on the logistics agenda. The main reasons are the lack of suitable space for traditional warehouses in big agglomerations, the trend to reduce the sealing of land, and the rapidly changing behavior of consumers. Most likely, the positive impact of Covid 19 on e-commerce is here to stay. With respect to the decisionmaking process, companies should not only focus on the cost comparison but also apply dynamic methods of investment calculus and scenario analysis. ■ REFERENCES AND NOTES [1] See Hunziker, Ch.: Die Last der letzten Meile. In: Frankfurter Allgemeine Zeitung, October 23, 2020, p. 11 [2] See Hartley, J.: Mehr als zwanzig Etagen. In: Frankfurter Allgemeine Zeitung, October 4, 2019, p. 29 Dietz, P.: Flächenmangel bremst Logistikmieter aus. In: Immobilien Zeitung, January 1, 2020. www.immobilien-zeitung.de/ 154662/ flaechenmangel-bremst-logistikmieter-aus (retrieved February 8, 2020) Gericke, G.: Berlins Logistiker legen Rekordjahr hin. In: Immobilien Zeitung January 27, 2020. www.immobilien-zeitung. de/ 1000067882/ berlins-logistiker-legen-rekordjahr-hin (retrieved February 8, 2020) [3] Early and very prominent examples in Germany are the Speicherstadt in Hamburg (1888), the so-called Siebengebirge in the port of Cologne (1909) and the warehouse of Gutehoffnungshütte in Oberhausen (1921/ 1925) [4] See Detert/ Ballenstedt: Architektur 1900, Bd. 3, Reprint Mannheim 2005, p. 10 [5] See Reich, O.: Die Gebäude der Landwirtschaft, in: Deutschlands Landbau Ostpreußen, hrsg. von der Landwirtschaftskammer für die Provinz Ostpreußen, Berlin-Halensee 1928, p. 73 [6] See Kerry Logistics: Kerry Cargo Centre. www.kerrylogistics.com/ media/ zyrbyhvb/ kerry-cargo-centre.pdf (retrieved December 1, 2020) [7] See Dobos, L.: Logistikimmobilien: Prologistik baut erstes mehrstöckiges Lager der USA. In: Logistik heute, November 8, 2016. www.logistik-heute.de/ news/ logistikimmobilien-prologis-bauterstes-mehrstoeckiges-lager-der-usa-13243.html (retrieved August 8, 2020) [8] See Khasimoiva Long, K.; Romano, B.: Amazon leases new multistory warehouse in Seattle, first of its kind in U.S. In: Seattle Times, September 10, 2019. www.seattletimes.com/ business/ amazon/ amazon-leases-new-multi-story-warehouse-in-south-seattlefirst-of-its-kind-in-u-s (retrieved August 8, 2020) [9] See Segro: Segro to deliver pioneering multi-storey hub for Ikea in Paris. Press release January 31, 2018. www.segro.com/ media/ pressreleases/ 2018/ 31-01-2018? sc_lang=en (retrieved August 8, 2020) [10] See Chetwoods: G Park London Docklands, the UK’s first three-storey warehouse. Press release April 12, 2018. www.chetwoods.com/ journal/ g-park-london-uk s-first-multi-storey-warehou s e (retrieved February 8, 2020) [11] See Brockmann, B.: Hoch hinaus. In: Süddeutsche Zeitung, October 13, 2016. www.sueddeutsche.de/ geld/ staedtebau-hoch-hinaus-1.3203611 (retrieved February 8, 2020) [12] See Four Parx GmbH: Leasing details for Four Parx Hamburg, Dreieich-Sprendlingen (w/ o year) [13] See Segro: Multilevel-Objekte: Logistikimmobilienentwickler wollen hoch hinaus. In: What’s Up, Vol., 1/ 2017 [14] See Dietz, P.: Logistik stockt auf. In: Immobilien Zeitung, July 9, 2017, p. 1 [15] See Tögelplan: Befahrbarkeit von Rampen. http: / / toegelplan.de/ leistungsbereiche/ fahrgeometrische-untersuchungen/ befahrbarkeit-von-rampen (retrieved February 10, 2020) [16] Bulwiengesa AG (Hrsg.): Logistik und Immobilien 2016, Hamburg 2016, p. 110 Idem: Logistik und Immobilien 2019, Hamburg 2019, p. 48-49 [17] PricewaterhouseCoopers (Hrsg.): Grüne Wiese oder Ballungsraum - Logistikimmobilien im Wandel, 2019, slide 23 Armin F. Schwolgin, Prof. Dr. Retired Professor, Baden-Wuerttemberg Cooperative State University, (DHBW), Loerrach (DE); and longtime Visiting Professor at Beijing Wuzi University, Beijing (CN) armin@schwolgin.de • Availability of land • Rising land prices • Higher construction costs • Higher process costs • Legal obstacles (building code etc.) • Socio-demographic changes • General purchasing behavior (online versus offline) • Desired service levels • Reduction of sealed land • Fewer traffic jams • Lower negative external effects Figure 12: Chances and risks of ramp up warehouses