Climate change has profound global effects.
The average global temperatures have been increasing consistently.
In fact, according to NOAA’s 2023 Annual Climate Report, the global annual temperature has increased by an average of 0.060C per decade since 1850. This has led to events such as wildfires and heatwaves.
Climate change has led to the disruption of ecosystems leading to the extinction of some species.
The adverse shifts in weather patterns have had widespread effects.
Warehousing has not been spared.
Due to the higher temperatures, there has been a need for cooling costs especially when dealing with foods and pharmaceuticals. Moreover, floods have affected transportation routes.
In this article, we are going to look at five surprising ways climate change is reshaping warehouse strategies in 2024. Hope to enlighten you on some strategies you could adopt to mitigate the effects of climate change.
Let’s get started.
1. Extreme Weather-Proof Design and Construction
Building resilience from the ground up.
Extreme weather is harmful to goods.
According to Everstream Analytics, extreme weather events are the top risk facing supply chain in 2024. These events could bring huge losses to your business.
To mitigate the effects of climate change, there is need for climate resilient warehouse designs. You could adopt impact resistant windows to reduce the effect of the adverse weather.
Additionally, you could use strengthened roofing. To avoid uplift, it is advisable to ensure that your roof is well fastened. You could also incorporate wind braces to guard against strong winds.
In areas prone to flooding, you could utilize elevated foundations. You could also utilize flood barriers around your warehouse.
You could also incorporate drainage systems that direct stormwater away from the facility’s base. This could help to reduce flooding risk.
Climate change has brought about extreme high temperatures and extremely low temperatures.
To counter this, you could adopt insulation materials such as foam. You could also utilize HVAC systems to regulate the temperature in your facility.
Hershey Company, a storage facility in Illinois, is a good example of a warehouse that has incorporated weather-proof design.
The facility has utilized 18 rooftop HVAC units to maintain an internal temperature of 60 degrees and a relative humidity of 50%. The goods in the warehouse are thus protected from extreme weather conditions.
With adoption of these advanced weatherproof features you could charge people to store goods for them during bad weather conditions.
2. Shift to Predictive Inventory Management
Forecasting Beyond Consumer Demand
Disruptions in supply chain are costly.
According to Economist Impact, disruptions in the supply chain can cost you about 10% of your annual revenue. This can heavily cut into your profit margins.
Extreme weather conditions can affect the transportation of goods. Events such as floods could render roads and railways impassable. This may bring about delays and increase transportation costs. Extreme weather could also damage the facilities.
You are probably familiar with the use of AI in forecasting consumer demand. Do you know that these systems can factor in climate data? You can use AI systems to study weather reports and predict when there will be extreme weather conditions.
It may also guide you on the routes that might be affected. This is one of the best warehouse business ideas because it ensures you are always prepared.
The system might suggest that you increase stock levels if there are anticipated extreme weather events such as floods. This ensures that you do not incur shortages.
Moreover, you can use these models to predict how extreme weather conditions might affect consumer demand.
For example, if heat waves are imminent, the demand for cooling systems may rise. This may prompt the models to increase the inventory quantities for the cooling systems..
Walmart, a global retailer, was having challenges in optimizing inventory across their many stores.
By leveraging predictive analytics they were able to reduce stockouts and overstocks. The AI models were able to study seasonal trends, purchasing patterns and weather forecasts to determine the optimal stock levels.
3. Localized Distribution Networks
Bringing Warehouses Closer to Home
Customers expect fast services.
Infact, as per Salesforce, 65% of customers expect immediate services. Delays may cause you to lose customers.
Due to extreme weather conditions you may delay the delivery of goods to customers.Some warehouse owners have opted to adopt smaller, more numerous warehouses to counter this problem. This helps to improve customer satisfaction.
Additionally, this helps to reduce your transportation costs. You are also able to lower carbon emissions. This may help you obtain your sustainability objectives.
Another reason for the preference of the multiple, smaller storage facilities is because of the scarcity of large pieces of unused land especially in urban centers. Expensive land rates may also hinder you from acquiring large storehouses.
This model is one of the best warehouse business ideas because it enables you to reduce transportation costs and leads to faster delivery.
Moreover this model lowers greenhouse gas emissions.
Localized distribution networks also have some shortcomings.
Challenges may arise in managing labor and logistics across the many branches. Inventory management may also become challenging because the demand for a single product may be different in the different areas of operation.
Additionally, this model may be very expensive.
Nike, a global fashion company, was struggling to react to the different consumer needs in different parts of the world.
By utilizing localized distribution networks, they were able to respond quickly to changes in the market. The localized network enabled the company to gather information faster and act before the other fashion companies could react.
4. Sustainable Energy Solutions Become Mainstream
From Grid-Dependent to Self-Sufficient
Climate change drives the shift towards sustainable energy.
This is because more people become aware of the impact of fossil fuels on the environment.
Governments are also taking measures to promote sustainable energy.
According to the Global Carbon Budget, an estimated 36.8 billion tonnes of CO2 was released in 2023. This is unsustainable.
Warehouses have also joined this shift.
You could adopt solar energy. This usually involves integrating solar panels into your roofing system. This model helps to lower energy costs and it also helps to reduce carbon emissions.
You could also utilize wind turbines to generate sustainable energy. Your storehouse will however need to be in an open space and in a region that experiences strong winds.
Geothermal systems are also a viable solution for utilizing renewable energy.
You may also need to store energy for usage when the above systems are not generating energy. You could utilize battery storage. Some of the batteries you could make use of include lithium ion and lead acid batteries.
Additionally you could use thermal energy solutions. The ice storage method is one thermal energy solution you could implement. You could adopt the phase change materials method.
These sustainable practices are extremely beneficial for the storage facilities. They lead to cost reduction. Incorporating systems such as solar panels will lower your energy consumption costs. Additionally, some governments give tax incentives and grants for utilizing renewable energy.
Depending on renewable energy sources also shields you from power outages.
5. Eco-Friendly Packaging and Waste Management Revolution
Rethinking the Wrap and Pack Paradigm
Plastic bags are non biodegradable.
To contain the climate change, many governments and regulatory bodies have either banned the use of these bags or imposed high taxes on them.
According to OECD, plastics contribute to 3.4% of the global greenhouse emissions. From this, it is easy to understand why authorities are against the use of plastic bags.
As a result, you may have to make use of biodegradable and reusable packaging bags in your warehouse.
Additionally, many governments and regulatory bodies have become strict on waste disposal.
To avoid any problems with the authorities, you could implement advanced recycling systems within your storage facility.
These systems could affect the daily operations of your storage facility.
You could need more space for the equipment you use in the recycling process. This may require you to redesign your storehouse.
SC Johnson Manaus, a household items manufacturer, decided to run in an environmentally friendly way in 2012.
In 2014, the plant was able to achieve zero waste status. They were able to achieve this by dedicating a specialized ‘Green team’ that was to formulate the recycling procedure. They were able to recycle and reuse materials in an environmentally friendly way.
Sustainable packaging is greatly influencing warehouse business models. It may increase demand for your products. This is because customers are becoming more environmentally conscious. They may be swayed by the eco-friendly business practices.
Additionally, sustainable packaging could reduce your disposal costs. This is because the materials used are biodegradable.
Conclusion
Climate change has adverse effects.
According to the World Health Organization, there will be approximately 250,000 additional deaths each year from 2030 to 2050 due to climate change. These are alarming statistics.
It is affecting every industry.
In warehousing, it has brought about weatherproof construction and designs. It has also led to the emergence of localized distribution networks.
Additionally, climate change has contributed to the shift to predictive inventory management. Moreover, it has contributed heavily to warehouses adopting sustainable energy solutions.
Climate change has also greatly contributed to the emergence of eco-friendly packaging.
The warehouse industry has always demonstrated great resilience and innovation in the face of adversaries.
As we progress, technological advancements will continue transforming the warehousing sector to solve the current problems.
You could also contribute to the conversation. What are your thoughts on climate adaptation in warehousing?
