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Supply Chain Graphic of the Week: How Many Million Square Foot DCs are Being Built in the US?

 

Total Number of Mega DCs is More than 100 in 2010 to 2016, with Many More Under Construction; What is Amazon's Share?

Feb. 1, 2017
SCDigest Editorial Staff

How many million square-foot DCs are being constructed in the US?

Historically, that million  square-foot level has sort of separated the "mega DC" from the rest of the pack, and we believe facilities this large have been most common in the retail sector, though certainly are seen at some consumer goods manufacturers and wholesalers as well.

 

In a recent market analysis, real estate firm CBRE put together the chart you see below, quantifying the number of mega DCs that have been built over the past seven years in the US, and how many are currently under construction.

 

 

Source: CBRE

 

As can be seen, 117 DCs of more than one million square feet were built in 2010 to 2016, 74 of them in the top 10 markets - though it is not clear how that is defined.  It appears the rankings are by total square footaget of those mega DCs in a market. That would mean that the other 43 mega DCs that were built outside the top 10 markets were the only ones in that area over the time period, and were less than the 1.2 million square feet that Phoenix's one facility came in at in terms of size.

 

The Philadelphia area - which we assume includes Allentown - led the way with 16 mega DCs over the period, followed by the Inland Empire area near Los Angeles and Dallas/Ft. Worth, with 13 mega DCs each.

 

29 DCs of a million or more square feet are under construction in the top 10 markets, CBRE found. It is not clear how many others may be in development outside these top 10 areas. The implication is none, since the last the last three on the list come in at exactly one million square feet.

 

The logical question here: how many of these are the result of Amazon.com?

 

Consulting firm MWPVL International, which has been following Amazon's fulfillment network in detail for years, told SCDigest that from 2006 through 2016, Amazon has constructed 37 fulfillment centers that were one million or more square-feet - or 32% of the 117 total mega DCs built over that period.

 

MWPVL also says Amazon has seven million square-foot or more DCs under construction, of the total of 29 in total in the US, representing 24% off the total of such facilities.

 

Remember when some predicted distribution centers would go away? Hardly.

 

Any Feedback on our Supply Chain Graphic of the Week? Let us know your thoughts at the Feedback section below.

 

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