Innovators and Transformers: The challenges of warehousification: balancing logistics spatial needs with social and environmental sustainability Open Access

Globally, inventories have been increasing relative to sales (Marzolf et al., 2024; Udenio et al., 2018) and moved closer to consumers (Mangiaracina et al., 2015). For example, inventory to sales has seen an upward trends from 2012 to 2020, hitting a peak at 1.68, and estimates for the US have increased from 1.1 in April 2021 to 1.31 in February 2025 (US Census Bureau, 2025). This has led to extensive construction of big box warehouses near metropolitan areas rather than traditionally smaller-sized warehouses at more central locations. These warehouses offer efficiencies through scale and capacity to flex with demand surges that smaller warehouses cannot. Moreover, the average size of new warehouse construction has been increasing (Hesse and Rodrigue, 2004; Nefs, 2022) – with the average warehouse size in the US doubling since 2002 (DC Velocity, 2017). This has been documented in areas in the US (O’Neal, 2022) and in dense countries in Europe such as the Netherlands, where warehouses are often constructed in scarce recreational, farming, or forest areas (Essenburg, 2023).

These big warehouses have their benefits to serve the growing demand; however, in multiple countries and regions, their expansion has led to a major debate over negative externalities related to the usage of scarce public space for warehouse construction – what we term warehousification – faced by locals without adequate benefits to offset the drawbacks. While new warehouses can stimulate the local economy, create jobs, and improve infrastructure, residents are opposed to the often unsightly buildings, noise, heavy-duty truck traffic, and emissions that come with new big box warehouses (Tare et al., 2024) and want to preserve the natural environment for public use and ecological conservation. Moreover, locals are resistant to the additional strains on housing markets brought on by the migrant workforce that may come with new distribution centers (Nefs, 2024a).

Critics are calling for simplification and reduction of the industry. Record low warehouse vacancy rates – hovering around 3–5% Young (2024) and rising leasing rates are seen in multiple countries and regions such as Japan (Mingtiandi, 2023), Northeast Asia (Inside Logistics, 2023) and European countries (Euronews, 2024) such as the UK, the Czech Republic, Poland, France, and Germany (CEO.com, 2023). These have been driving rapid warehousification. As in the US, some municipalities with high logistics activity concentration have moved to temporarily ban new warehouse construction to buy time for further decision making (Wolzak and Laikens, 2022).

The issues at the center of the clash between local residents, developers in the logistics industry, and local and central governments pertain to the unique challenges of warehousification. This refers to the need to aim for not only ecological and social sustainability targets, but also the sustainable planning and development of logistics space. Locals are feeling disempowered by the growing warehousing sector. Addressing this requires a new framework to balance the social and environmental sustainability in supply networks and the physical distribution of goods to sustainably serve consumer demand.

Our focus on social and environmental sustainability along with spatial needs is grounded in global pursuits to expand the definition of sustainability. For example, in 2015, the United Nations (UN) developed 17 Sustainable Development Goals (SDGs) intended to encourage peace and prosperity for people and the planet in urban, peri-urban and rural areas (United Nations, 2023). These goals include aims to encourage safe, peaceful and inclusive residential areas (SDG 11) and use of green space (SDG 15). However, up until this point, the combination of social and environmental sustainability has not been strategically and effectively incorporated into decisions on warehouse type, size, and location. This is underscored by Perotti and Colicchia (2023), which states that “A promising area for future investigation may involve the social side of sustainability connected to the adoption of green strategies within logistics facilities, as well as its related implication” (p. 227). Moreover, strategic logistics spatial planning must consider the integration of both urban and rural spaces. This includes considering how to effectively and efficiently use peri-urban space that serves growing societal supply chain needs while reconciling the land’s preservation. This comes into play in particular with warehousification as new buildings are spread out into areas that impact residents rather than in central aggregated hubs to reduce the number of local communities impacted.

The challenges brought about by warehousification are becoming more present as the size and proximity of warehouses to residents has grown (CalMatters, 2023; Nefs, 2022). Across the US and countries in Europe like the Netherlands, locals outside major metropolitan areas with growing logistics activity have organized protests, signed petitions, raised money to combat planned construction of warehouses, and taken legal action against industrial developers and city councils over potential environmental impacts (O’Neal, 2022). Elected officials have responded by proposing and passing moratoria to slow warehouse construction. However, developers and logistics companies claim the construction is necessary to serve new demand patterns and create local jobs and many town and city officials depend on local building permits and tax revenue from warehouse developers (King, 2023). Moreover, some development activity can actually improve the local environment through cleanup efforts and new, high-efficiency building and technology [e.g. solar panel installation for local power use (Prologis, 2023)]. Therefore, a solution requires the different actors to align and organize their incentives to create more efficient solutions that outperform existing ones that create such negative social and environmental externalities.

The need for storage space is a consequence of changes in global and local supply chains, and are touched on by various streams of literature: spatial economics, spatial sustainability, and sustainable or green logistics. However, a combination of approaches from these disciplines is needed to adequately address warehousification.

The spatial economics literature typically focuses on one of three main levels: urban, regional, and transportation (Fujita et al., 2001). However, Proost and Thisse (2019) note, “there is a need for more integration between, on the one hand, regional or urban and, on the other, transportation economics” (p. 577). Similarly, work in the field of spatial sustainability has seen inconsistencies in definitions and has suffered from a weak connection between theory and practice (Fiala, 2008).

Warehousification challenges are also considerations within the (green) logistics literature. Much of the research focuses on network design and warehouse facility location problems (Mangiaracina et al., 2015) but not on the space that these facilities need and how best to use that space for economic and social good. Further, the topic is addressed by research on green logistics and sustainable logistics. Just as proper spatial planning makes an integrated trade-off between all associated costs and benefits rather than limiting itself to the spatial consequences of the warehouse buildings, logistics network design should also incorporate spatial and sustainability of warehouse placement considerations.

In this paper we make two contributions to better frame the discussion. First, we conceptualize a critical factor for logistics development: warehousification, which requires concerted efforts from policymakers and logistics practitioners, and support for solutions from researchers. Second, we draw from different streams of research and best practices to offer a framework of options for policymakers on how to best utilize the existing warehouse space to serve demand and limit the negative societal and environmental impacts of any new required construction. We further discuss the trade-offs that must be considered to help address warehousification.

The remainder of this paper is organized as follows. In Section 2, we discuss the relevant streams of literature upon which we draw, but which individually do not adequately address the main factors associated with warehousification. In Section 3, we discuss the methods for data collection and the process of developing our framework to address these challenges. We describe our results in Section 4. Finally, in Section 5, we demonstrate the challenges in conducting research in this domain and conclude.

The concept of spatial sustainability has been defined and applied in several ways in the existing literature (Hillier, 2009), which has resulted in a lack of a clear, comprehensive definition. In some cases, it describes how economic activities are spatially distributed (Grazi et al., 2009). In others, it involves the ecological footprint of a city – that is, the ecological impact of human activities on the land area needed to sustain these activities (Rees and Wackernagel, 2008). The ecological footprint aspect has also been criticized for its lack of basis on economic principles and poor assumptions that contradict theory and practice (Fiala, 2008). Moreover, Van den Bergh and Verbruggen (1999) argue that “the spatial dimension of environmental sustainability and sustainable development has been largely neglected by environmental and ecological economists alike (see, e.g. Costanza and Patten (1995))” (p. 68). The authors go on to suggest that one of the important aspects to consider for a comprehensive view of spatial sustainability is social-political issues, which include considering the negative effects of trade such as weakening of community structures and degradation of landscapes. In other words, in general, spatial sustainability has typically focused on the environmental rather than social aspects of sustainability, particularly aspects at the heart of the warehousification debate.

In general, spatial sustainability typically refers to the ecological effects of populations and economic activity (see for example, van den Bergh and Nijkamp (1995)) and fails to consider the social aspects of sustainability. However, some argue that spatial sustainability should consider the “triple bottom line”: the social, environmental and economic effects of business operations (Ding et al., 2015; Elkington and Rowlands, 1999; Fischer et al., 2007). Wackernagel and Rees (1997) argue that investing in the preservation of natural resources does not make economic sense in the short term and thus, a mindset shift is needed to overcome existing barriers such as ignorance, denial, and the separation between consumption and production, which limits consumers’ visibility and awareness of negative environmental impacts.

The field of research on spatial economics aims to understand how and why economic activities are distributed in and across geographic regions. Two types of forces drive the location of economic development: centripetal and centrifugal forces (Proost and Thisse, 2019). On the one hand, centripetal forces lead to the concentration of economic activities. Agglomeration is one example – where firms co-locate to benefit from knowledge spillover, skilled labor pools, and economies of scale. An example in the US is Silicon Valley. On the other hand, centrifugal forces lead to the dispersion of activities. For example, high land costs near urban areas could lead businesses and developers to choose to locate in suburban areas with lower existing economic benefits. Krugman (1992) offers a model of these counter-acting forces.

Within spatial economics, urban economics, regional economics, and transportation economics each consider different aspects of spatial needs. Urban economics deals with the formation of cities, labor and housing markets, and land use and zoning. Regional economics takes a larger geographic unit of analysis and considers factors such as production, development policies, and international trade. Within the spatial economics field, transportation economics focuses on the movement of people and goods in and out of a region, within urban areas, and how infrastructure effects regional growth and trade (Redding and Turner, 2015). Hesse and Rodrigue (2004) contend that the movement of goods has received very little attention in regional economics and geographic sciences. After analyzing the changes in how logistics considers the core dimensions of transport geography, the authors offer the notion of logistical friction, which more appropriately incorporates the relevant factors: transport costs, organization of the supply chain, and transactional and physical environments in which freight distribution occurs. Notably, while urban and regional economics take the location of firms and households as endogenous decisions, most transportation economics research takes their locations as given. In reality, facility location decisions directly impact transportation costs and efficiencies. For instance, efficiently located storage generally reduces transportation movements and hence carbon emissions.

In fact, existing spatial economics literature does not consider where goods are stored – rather, there is an implicit assumption that goods are produced in one location and immediately consumed in that same location or in another with associated transportation costs. However, there are opportunity costs to using space in prime locations to store inventory rather than for residents or to be protected as nature reserves. The trade-off between these opportunity costs, increasing returns to agglomeration and transportation costs must be made (Fujita and Thisse, 2013). This gap in the literature leaves practitioners and policymakers without frameworks to deal with warehousification.

While sustainable logistics has received quite a lot of attention in the literature, much of it focuses on environmental sustainability (e.g. Harris et al., 2014; Tirkolaee et al., 2023). Moreover, the research on sustainability in relation to facility location typically focuses on how location impacts transportation distances and routes and the subsequent environmental effects (McKinnon et al., 2015; McKinnon, 2018) as well as warehouse management systems (Minashkina and Happonen, 2023) and operations (Bajec et al., 2020), and even warehouse facility location decisions. For example, Harris et al. (2014) study the capacitated facility location problem that considers both cost and CO2 emissions using a multi-objective optimization approach. However, the authors solely focus on a singular metric of the environmental effects of facility location decisions. Similarly, Tirkolaee et al. (2023) focus on environmental aspects of facility location decisions. The authors look to minimize total costs for the location-allocation-routing problem (LARP) while integrating factors such as environmental pollution and energy-efficient vehicles. Björklund and Johansson (2018) review the literature on urban consolidations centers and find that although existing research uses sustainability factors in such planning decisions, often they do not measure or evaluate the impact of the consolidation centers. Existing research explores the need for structural and organizational solutions at a strategic level rather than tactical to make better, more sustainable logistics (Aronsson and Huge Brodin, 2006).

In addition to the facility location decision, the literature explores strategies to make warehousing operations more “green”, or sustainable (e.g. Perotti and Colicchia, 2023). This integrates environmentally friendly operations with tradional logisitics decisions to minimize energy consumption, emissions and energy costs (Bartolini et al., 2019). For example, Wehner et al. (2021) discuss how warehousing facilities can utilize energy-efficiency practices that improve environmental impact as well as costs. The framework presented by Perotti and Colicchia (2023) suggests six strategies: green buildings such as improved insulation (Agyabeng-Mensah et al., 2020) and design and construction strategies (Navia-Osorio et al., 2022); utilities such as installing solar panels for on-site use (Molleti and Armstrong, 2021); lighting for example by using LEDs (Füchtenhans et al., 2023) and sensors to reduce consumption (Lapisa et al., 2020); material handling and automation such as alternative energy equipment (Faveto et al., 2022); materials such as including reduction (Agyabeng-Mensah et al., 2020), and reuse/recycle (Ali et al., 2020) and operational practices through optimal routing (Yang et al., 2023) and scheduling (Stanković et al., 2022).

The multiple aspects of sustainability within logistics planning decisions do come up in some papers, however. He et al. (2018) review a set of papers on sustainability in logistics and classify them by which of the three dimensions of sustainability they consider: environmental, social and/or economic. However, as Tejada and Conway (2024) note, very little research has been conducted on the social impacts of logistics facilities and how this affects the surrounding communities. Rather than the causal effects of warehouse facilities’ presence on nearby areas, there have been a few studies that explore correlations between local demographics and existing warehouse facilities’ existence. For example, Tejada and Conway (2024) measure the vulnerability of local populations based on labor data in the presence of logistics facilities and find that logistics facilities tend to be located in areas where the population already has a high level of vulnerability. Moreover, Yuan (2021) finds that warehouses tend to be located in areas with a high percentage of racial minorities as well as in low- and medium-income minority neighborhoods. Nefs et al. (2023a) and Nefs (2024b) consider the spatial and sustainability effects of the development of big box facilities in the Netherlands. Despite these few studies, there is still a considerable gap in the literature offering a comprehensive framework to help guide practitioners, policymakers and researchers.

This paper is driven by a practical challenge – that is, warehousification. While we demonstrate the shortcomings of the existing literature and subsequently merge different streams together to develop our framework, we also combine it with industry perspectives from our field experience interviewing and surveying warehouse practitioners and offer a framework based on this practical expertise. A similar approach is used by Trevisan et al. (2024). We collect the perspectives on challenges and solutions related to warehousification.

We build our framework to help researchers address the challenges of warehousification. Jazairy et al. (2024) argue for academic research on green logistics to catch up and keep pace with practice. The authors discuss reasons it typically does not keep up as well as how researchers can pursue such “pracademic” approaches in green logistics.

While we have experience with practitioners globally, we focused our directed information collection for this study on the challenges in the Netherlands. Practitioners in the Netherlands are acutely aware of the challenges with warehousification. In the country, which contains the Port of Rotterdam – the largest seaport in Europe, the largest outside East Asia, and generates sizeable logistics flows – the debate has reached national levels (Essenburg, 2023) with calls to the national government to work with the provinces and create a centralized policy framework to limit or prevent new big box warehouses (M.A.M. Adriaansens, Dutch Minister of Economic Affairs and Climate, 2022).

The country has a high number of warehouses per capita as compared to other (European) countries (Nefs et al., 2023b), which leads to additional concerns in the Netherlands. For example, the presence of warehouses draws migrant workers, which strains an already stretched housing market. Moreover, there is concern that the Netherlands provides storage space for the rest of Europe with only marginal domestic economic benefit (Stec Groep and Denc, 2022).

While the Netherlands is a strong case that highlights the challenges of warehousification, it is not so unique that our analysis cannot be generalized to other contexts. For example, with the Port of Antwerp-Bruges and the Port of Hamburg, Belgium and Germany face challenges similar to the Netherlands. Similarly, Singapore and Japan, both small land mass countries with large logistics industries and major ports, face challenges with warehousification. In addition, areas close to major ports in North America such as the Port of Los Angeles/Long Beach in southern California in the US and its adjacent “Inland Empire” as well as the extremely densely populated areas near the Port of New York/New Jersey in the US, and the region around the Port of Vancouver in Canada all face the same challenges.

Through our experience, conversations with and survey of practitioners in the Netherlands, we collect information from big box warehouse users (as defined by logistics service providers (LSPs) and shippers of Large (L; 10,000–20,000 m²), Extra Large (XL; 20,000–40,000 m²) and Extra Extra Large (XXL; > 40,000 m²) warehouses across the Netherlands). This resulted in responses for 81 warehouses. For a more detailed discussion of the results of these see Acocella et al. (2024). Here, we discuss the main challenges and potential solutions practitioners identified with respect to warehousification, which helps inform our framework.

Several key challenges emerged from our data and interviews. The top challenges for both LSPs and for shippers are labor availability and limited warehouse space. Simplification and reduction of warehouse activities as well as higher performance of these facilities and better utilization of the space would be key to addressing this challenge. These top challenges are followed by local and national regulations. The labor and warehouse space concerns are also the main issues reported in the media and by respondents. As for those concerned with regulations challenges, this suggests that regulators can have a major impact on the industry if they can come up with the necessary regulations that support the industry. Of course, these regulations must keep in mind societal concerns as well to help empower the local communities.

Accordingly, the top potential solutions identified in our experience are process automation, larger or taller warehouses and supportive regulations. Process automation and larger/taller warehouses both speak to the need for more total inventory to be stored within the same spatial footprint. This also speaks to the idea of creating logistics hubs to aggregate resources and create opportunities for efficiencies. Process automation can lead to greater efficiency and increase inventory density. Automation may reduce total labor force needed; however, most warehouse automation processes simply help workers do their jobs more quickly and safely. Supportive regulation will be important only if the new policies can effectively address and mitigate concerns for both sides of the debate.

Collaborative storage – a potential solution that comes up as a strong contender – may increase the total space that can be used. This requires significant alignments of activities from various actors as well as better performance and efficiency. For example, companies like Flexe find spare warehouse capacity and fill it with retailers’ short-term inventory Soper (2017). We observe that warehouse operators typically look for solutions that aim for greater efficiency rather than footprint growth. Based on our observations and experience, we develop a framework to systematically present the potential actions and interventions to deal with warehousification challenges.

We structure our framework along five dimensions that organize the interventions in classes: Shape, Hub-ify, Align, Perform and Empower (see Figure 1). To develop the framework, we employed an approach that integrates qualitative insights, survey data and theoretical foundations. Our process combined empirical data-gathering, practitioner engagement and academic literature review. The SHAPE framework builds from the indicated challenges and potential solutions gathered from this process and in a manner similar to other frameworks developed in the literature that address societal challenges. For instance, McKinnon (2018) offers a set of approaches to decarbonize logistics activities and Hoffman and Glancy (2006) suggest corporate strategies for dealing with climate change. Such approaches do not follow a formal empirical research approach, as the objective of such frameworks is not to develop or propose new theory, but rather reflect and organize developments in industry and society. Frameworks like these are meant to inspire academics to conduct more formal research, help structure public and policy debates and inform managers of potential strategic directions, aligned with the objectives of the “Innovators and Transformers” section of this journal.

We conducted over 20 semi-structured interviews with industry practitioners to better understand real-world experiences and challenges. Participants included key stakeholders such as supply chain managers, transportation and inventory planners, logistics real estate advisors and other specialized academics in the field. The participants were chosen based on prominence within the field of logistics, participation in industry round tables and discussion groups and leadership roles in shipper, carrier, LSP or logistics real estate firms. We aimed to achieve a representative sample by including participants from large and small firms as well as local (Dutch) and international (Europe-wide and global) organizations.

The interviews included open-ended questions about interviewees’ experiences with warehouse capacity shortages, staffing issues, push-back from local communities and operational challenges as well as potential solution approaches. The insights gained from these conversations helped identify recurring themes and actions we include in the framework.

To further contextualize our findings, we attended several industry conferences and practitioner events. These provided opportunities to engage on current trends, emerging challenges and innovative practices in the sector. In addition, we presented initial findings to practitioners to solicit feedback and validate our emerging framing.

In addition, we designed and distributed a survey to industry participants. In the survey, we asked users of warehouses at least 10,000 m² in footprint to provide not only qualitative challenges and potential solutions to warehousification, but also quantitative data on warehouse size (footprint and height), capacity utilization, labor needs and trends of these factors over the previous five years. The survey questions were developed and iterated upon in collaboration with logistics and warehouse industry groups and the results were validated by follow-up conversations with practitioners and other academics that study strategic and operational warehouse decisions. While we do not use the collected data for statistical analysis nor use it to draw conclusions, the data are used as empirical evidence to help refine the actions identified in the framework. Details of this survey and further findings are provided by Acocella et al. (2024).

Further, we incorporated insights from our collective field experience as researchers and practitioners in the transportation and logistics sectors working in Europe, North and South America and Asia. Our firsthand experience of industry operations provides a practical lens through which we can identify opportunities for research, which we believe is a contribution of this paper.

Finally, to anchor our findings in established research, we reviewed the relevant academic literature, as discussed in Section 2. The outcome of our process is a framework for logistics practitioners and policymakers to deal with the challenges of warehousification. Distinct from previous frameworks, our study focuses on a domain that has received little attention – the strategic and operational factors of warehouse facilities and their spatial needs – and considers both social and environmental impacts. As a result, we offer the SHAPE framework: Simplify, Hub-ify, Align, Perform, Empower. The framework is depicted in Figure 1 and each of these factors is discussed in detail in the following subsections.

The SHAPE framework consists of five actions that may mitigate the negative effects of warehousification based on our interviews as well as input from other industry engagements and as quantitative survey data.

Simplify entails reducing total warehousing activities and moving toward less complexity in the number and types of products stored. This also implies strategic prioritization of which products and industries are supported by existing local warehousing infrastructure, which may lead to customers having to shift expectations and accept longer lead times.

As demand grows, new logistics space may become scarcer, increasing land value and prices. While this may introduce additional challenges for the logistics industry such as higher renting costs, it can also serve as an opportunity to identify how to focus efforts. Scarcity and limitation may lead to more efficient use of existing space. Moreover, limitations can force innovation in logistics, just as it has in other industries; for example, CO2 emission regulations sparked innovation in electric vehicle and battery technology (Andwari et al., 2017). In logistics, this could materialize as novel methods of densification, automation technology and collaborative storage processes that have not yet been widely implemented in practice. Our industry experts discussed that such novel technologies are promising, but coordination and implementation challenges still remain.

Critically, greater scarcity of storage space will necessitate a prioritization of some industry segments’ goods over others. This calls for a balance between social well-being and traditional commercial supply chain network and distribution planning. How to choose which industry segments are prioritized will require a set of trade-offs.

On one hand, the market may be able to regulate which industry segments add the most value to national and regional economies and society. Consumers’ value of industry segments – as measured by their willingness to accept higher prices – will justify the high rent costs associated with limited warehouse space that must be paid by retailers. On the other hand, policymakers may take a social value perspective, which requires a national-level choice: which industries should be prioritized given limited logistics space? For example, from our experience, practitioners have pointed to the Strategic Autonomy initiative – which aims to relieve Europe from over-reliance on the US and other global powers in critical industries such as healthcare, aerospace, defense and technology – that may guide efforts to retain inventory space for these industries.

Both the research (Nefs et al., 2023b) and our interviews demonstrate that spatial planners in the Netherlands have argued for warehouses to be moved to Germany or Belgium so that the country does not become the storage facility for the rest of Europe. However, this would likely lead to more transport movement on the highways, lower service levels, higher costs for consumers or a combination.

Simplify can also include reducing the number of activities performed at a warehouse and/or changing customer expectations. For example, if a warehouse received products that are meant to be distributed directly to customers, then it must not only receive and store the products, it must also perform the activities of breaking down shipments into smaller units, storing smaller, less efficiently packed products and then sorting and picking them once orders come in for them. This may become more complex led by customer expectations of short delivery times and a wide range of product availabilities.

Adjustments to inventory decisions will need to be made when shifting to a product or industry segment prioritization strategy as well as by reducing the number of activities performed at the warehouse. Network decisions will come into play when considering how to serve customer expectations – for example, simpler networks may mean products are stored farther from customers and/or aggregation, both of which may require flexibility in customers’ expectations.

The concept of hub-ify refers to agglomeration, aggregation or concentration – that is, to move from many small logistics parks to large logistics parks to pool capacity and other resources. As the demand for logistics activities has grown, storage facilities have been built as needed, resulting in geographically disaggregate locations. They are often located close to supply or demand points to reduce transport costs. However, taking a system-wide perspective, pooling logistics activities into clusters can bring about greater efficiencies. Such agglomeration capitalizes on economies of scale and scope, which results in reduced land requirements, infrastructure, labor and capital resources for the same total storage capacity (Rivera et al., 2016). It allows related industry actors to learn from one another and capitalize on shared resources. Our interviews demonstrated this to already be a highly successful model in the logistics industry and others. Such clusters have been implemented in the chemical industry in the Netherlands and Germany (VNCI, 2023) and in the logistics industry in Zaragoza (Spain), Venlo (Netherlands) and Singapore, for example Sheffi (2012). Workshops and industry events held at such logistics hubs provided some of the industry perspectives upon which our framework is based.

Clustered logistics parks facilitate knowledge exchange, shared physical assets and availability of a specialized labor pool (Rivera et al., 2014, 2016; van den Heuvel et al., 2013) which in turn can reduce spatial needs within the park. This may include shared truck parking, which reduces the total parking space needed. Security gates, fencing and surveillance can also be shared. Such resource pooling can also be applied to workers between facilities, which increases job security and labor availability as demand fluctuates.

The clustering of activities together, however, can also have negative effects. While these clusters of warehouses can be located farther from populations to limit negative societal impact, transportation costs will increase and some people may still be negatively affected. For example, warehousing workers pulled to the area becomes even more challenging if there are existing local housing shortages (Nefs et al., 2023a). With limited space in which logistics actors can store inventories, and as economic activities grow in a cluster region, land prices will increase (as also discussed under the Simplify action). This could lead to sprawling effects (Heitz et al., 2020) (i.e. centrifugal forces) as businesses shift away to neighboring areas (Rivera et al., 2014; Henderson et al., 2001), thus eliminating the original benefits of the clusters. Clusters will also impact supply chain network decisions.

Policymakers therefore must decide which geographic locations in the region are best suited for these clusters, which existing brownfield locations can be expanded upon or used as they stand for clusters, how many greenfield locations are needed, what is the cost for development and how capacity should be spread across shippers and LSPs with big warehouse capacity needs. Stakeholders including shippers, LSPs and local communities should be engaged in these discussions. Solutions may also be drawn from other industries or countries. Additionally, policymakers will have to consider whether to enable dedicated housing near the logistics clusters to alleviate housing challenges without disrupting residents’ housing needs.

Align refers to the processes that require coordination between parties to better utilize warehouse facilities. One option is densification: doing more with existing warehouse space. Another includes collaboration between warehouse users’ demand to share warehouse space or through multi-story warehouses to create more space for the same footprint.

A key action to aid in addressing warehousification is by doing more with existing space through densification – that is, more efficient utilization of current space. Much of the opposition to big box logistics facilities is due to new construction. Locals resist the noise, pollution, road wear-and-tear and additional traffic introduced by such logistics warehouses. In addition, locals experience nuisance during the construction of the resulting, often unsightly, buildings that remain. Therefore, rather than building additional warehouses, densification involves better use of the space between, within and above the existing storage racks and within the boxes that contain the products on the racks. On average, big warehouses are reported to be at near-full capacity at about 80–85% to allow for proper slotting and enough space to store inventory (Hopp and Spearman, 2011). However, our interviews suggest that even in warehouses at capacity, there is often still empty space that can be used.

Utilization of this space may involve a design update. This may include shifting storage racks and packages closer together, creating narrower passageways between them and using empty overhead space for storage with the use of automation and advanced warehouse equipment. However, packing more racks into the same space and using mobile racks that move on rails to open an aisle between them (Boysen et al., 2017) lead to narrower aisles and less accessible shelves. While this may increase effective storage capacity, it may also lead to congestion of pickers – human or robot – and delay a time-critical process in goods delivery, according to our industry experts. Some existing research has explored the conditions that avoid this drawback (Chen et al., 2019). In a similar way, there may be overhead space that can be more efficiently filled with inventory. Technology and automation such as overhead cranes can utilize higher storage space and place incoming inventories in otherwise hard-to-reach areas (Yu and De Koster, 2009).

Another way to increase density is by reducing the use of single standard-size storage bins and boxes. While standardization leads to process efficiencies, it can lead to bins with significant empty space taking up much more volume on a shelf than the products it contains. Shifting to a few standard box sizes can increase space efficiency. However, our interviewees point out that it would require a major redesign of existing storage and picking systems or additional costs for replacement as well as more advanced algorithms to match products and appropriate container sizes.

Further densification can be achieved through collaborative storage by allowing multiple users’ goods to cohabitate in the same storage space. Such solutions have demonstrated their potential to add value in smaller warehouses (Jamili et al., 2022; Phillips, 2015). Based on our practitioners’ experience the extent of the effects have not yet been explored in big box warehouses. This practice needs to be coordinated by the shipper or LSP that operates the warehouse or a third-party and would require detailed knowledge of the warehouse and frequent space availability information. In addition, it requires considerations for how to structure short-term contracts and aligning inventories with complementary peak seasons to fill warehouse space continuously. Such warehouse sharing is offered by marketplaces such as Stockspots or Flexe (Soper, 2017). However, it is far from being a widespread practice yet.

The benefit of doing more with existing space, is that it does not require new warehouse construction. Therefore, there should be no additional big box buildings that negatively impact the environment and society; virtually no additional new construction investment or environmental emissions such as CO2, nitrogen, waste and other pollution associated with new construction. Moreover, focusing on more effective usage of existing warehouse space utilizes the existing warehouse workforce rather than expanding an already constrained labor pool.

However, it comes with challenges, as the experts point out. With densification, redesigning internal warehouse infrastructure does require investments in infrastructure and technology, typically in automation or rack infrastructure, while the warehouse may become less general-purpose due to the required equipment, thus reducing usage flexibility. It must be determined whether space productivity may justify these additional investments. Additionally, collaborative storage adds coordination complexity within the warehouse. This starts with parking and dock slots as additional suppliers make use of the facilities as well as scheduling that must be coordinated. While differences in demand patterns are opportunities for collaborative storage, variability in the capacity needs of one user may also disrupt the operations of others. Moreover, inventory loss, damage or theft may lead to further liability challenges. A central coordinator will be needed to orchestrate these activities (Cruijssen, 2020).

Finally, multi-story warehouses at sites already allocated to logistics activities can increase available storage capacity without increasing the required logistics footprint (Levitt, 2023). They have been constructed in areas such as Hong Kong, Shanghai and Tokyo – reaching from 3 to 17 stories (CBRE, 2023) – Singapore (Brelih, 2020), and areas in the US (JLL, 2023), where population and land use density and land prices are already high.

While taller warehouses offer potential spatial benefits, they have their challenges. Taller warehouses have higher construction costs and restrictions, must be designed for this configuration from the start (i.e. existing warehouses cannot be redesigned to accommodate), require costly crane technology and more complex operations (e.g. incorporating vertical movements into picking routes). Further, a larger set of factors must be considered for the implementation of these warehouses to realize the potential benefits. For example, land costs must be high enough to warrant building up rather than out; or building permits limit the number but not height of buildings. In addition, since multi-story warehouses must be built this way from the start, there is a lack of flexibility with changing demand patterns. The associated long payback periods and high risk are reasons multi-story warehouses have not become more prominent in practice (McKinnon, 2009).

The perform aspect of the framework refers to improving the value, performance or functionality of the warehouse facilities. This may include making warehouses more visually appealing for locals and passers-by or producing on-site energy and becoming strategically independent from outside energy, resource or labor needs. In our experience, such designs have been presented at industry conferences and highlighted by some industry practitioners. The Perform action many also include looking at a new metric in warehousing: the value of inventory per cubic meter.

A key complaint about big box warehouses is that they are unattractive and destroy the natural views of the local area. This can be mitigated by designing and building facilities that are more appealing and integrate better into the surroundings. Rai (2023) suggests doing so through context-sensitive building design – in other words, taking local design and architectural standards into account when designing new warehouses. Making these buildings more palatable also includes improved landscaping and lighting (Burton et al., 2011) and imitating the look of local residential buildings (Bklyner, 2023). This also helps reclaim these buildings after warehouse activities have concluded (Lane and Rappaport, 2020).

Another way to improve the performance of warehouse facilities and operations is to consider how much value the inventory creates for the economy and society and is it worth the total (i.e. financial and social) cost to store it (see McKinnon, 2009). This can help policymakers and industry players consider actions to combat warehousification such as simplification through prioritization of industry segments as discussed earlier, or for LSPs, which customers and which inventory is best suited for collaborative use of shelving space. Considering the value per cubic meter of warehouse space is also the metric needed to measure the effectiveness of densification strategies. Thus, we suggest policymakers as well as warehouse operators and users apply this metric more readily when making inventory decisions where capacity is tight.

Finally, to improve the performance of big box warehouses, introducing energy production technology to becoming self-sufficient, or strategically independent, has high potential. The large footprint of these big box warehouses makes them prime candidates for solar panel installations (Prologis, 2023). Logistics clusters, rather than individual warehouses, have even higher potential as facilities share pooled resources – creating efficiencies – and there is a larger, more concentrated rooftop total area for potential energy production. In fact, the large surface areas of big warehouses are a top contender for industry solar panels that could produce enough solar energy to power electrical box trucks or onsite activities (e.g. Stiltiens, 2022; Jowett, 2024). However there still exist cost and location barriers to full-scale implementation.

The final factor in the SHAPE framework, empower, entails ensuring not only that negative externalities of warehouses do not disproportionately fall on locals, but in fact adding value to local residents. Industry practitioners suggest this to include creating jobs, investing in housing options and other infrastructure and fostering local businesses, and investing in local environmental cleanup and redevelopment projects.

Big box warehouses and associated logistics activities generate noise and heavy freight traffic on local roads, which garner safety concerns and have a low ratio of jobs per square meter of space they occupy (Dablanc and Rakotonarivo, 2010). Logistics clusters would only amplify the negative effects on locals. Thus, investments must be made by the warehouse real estate investors, users and policymakers to mitigate these effects. This may include clear economic improvement to the area with the creation of high-quality, stable local jobs. If additional workers are needed, whether for flexible capacity during peak seasons, or for long-term positions, housing for the labor force may be needed and can be co-located near the warehouses and logistics parks to reduce the strain on local housing markets.

Heavy truck traffic brings about a host of negative externalities to the local area including worsening traffic and pollution. Pollution mitigation approaches should be considered such as encouraging electric vehicle use and high asset utilization (see, e.g. McKinnon, 2018). In addition, truck traffic is damaging to roadways and increased transport flow near warehouses would have a significant impact on the local infrastructure. Moreover, increased truck traffic brings about safety concerns. Thus, investments should be made in road improvements and regular maintenance, traffic lights, enforced speed restrictions, as well as sidewalks for safe pedestrian use.

To help get buy-in from local business, it can be important for developers of new warehouse facilities to work with local businesses. For example, Prologis has developed a Strategic Alliance Program that works with local businesses and connects them with the primary facility users to encourage partnerships and to support and add value to the local economy (Prologis, 2024).

These approaches to empower locals are intended to not only minimize the negative impact of new warehouse development on locals but integrate the new facilities into the surroundings. This helps address the main social concerns at the center of the warehousification debate, which has regulators and locals clashing. While these are important considerations, there are of course costs involved, particularly for the warehouse developers and users. As a result, this may discourage development in some areas if the integration and empowerment costs are too high.

Some examples of industrial integration empowering local communities have been observed in other industries and geographic locations. For example, ASML, the largest supplier of lithography machinery to the global semiconductor industry, is a major presence in the Netherlands. Not only does the company create jobs for locals, but invests in community engagement and outreach through affordable housing initiatives, scholarships and donations to food banks (ASML, 2024). Similarly, Google invests in STEM programs, water and agricultural quality projects and provides students with laptops and free Wi-Fi services to areas in which it builds large data centers (KMTV, 2024; Chernicoff, 2024).

The global rise in construction of big box warehouses presents a complex challenge for practitioners and policymakers that intersects the fields of economics, environmental and social sustainability and logistics. Warehousification has sparked significant public debate over the use of scarce public space in many regions. In this paper, we propose the concept of warehousification and a need to more explicitly incorporate social and environmental factors in decision making for spatial planning of physical distribution and logistics activities. This requires strategic logistics planning that considers the distribution of goods and benefits of the logistics industry presence while prioritizing land preservation and minimizing the negative impacts on local communities. We offer a framework for logistics actors and policymakers to address these concerns and mitigate some of the challenges brought about by warehousification that have sparked disputes between practitioners, municipalities and local residents.

This framework is built from a combination of semi-structured interviews, informal surveys, industry engagement events, our experience, academic literature and validation with other academics. From these sources, we offer a set of five actions to address the challenges associated with warehousification: Simplify (reducing and selectively prioritizing warehouse activities, managing consumer expectations), Hub-ify (shifting away from small logistics parks to large logistics clusters to capitalize on economies of scale and scope), Align (creating opportunities for collaboration and storing more inventory per square meter and cubic meter of space), Perform (making efforts to build facilities that integrate better with local communities, making decisions based on inventory value per cubic meter and striving for energy production and strategic independence) and Empower (reducing warehousing activities’ impact on residents, creating jobs and giving back to the local communities).

Our framework has been designed such that private actors can take the lead in reshaping the warehousing industry to address the societal challenges of warehousification. It is however a fair question to what extent policy makers could or should play a role here. In many countries, policy makers act as or enable change agents to help industries reshape and develop, for instance through matchmaking, education and research. A more direct way for policy makers to reshape the warehousing industry is through land pricing and zoning. Land prices and zoning designations drive a lot of the corporate decision making, such as location choice (to facilitate clustering) or location size (to facilitate densification and taller buildings).

While the spatial consequences of logistics decision making have become part of the public debate in many geographies, current research lacks attention for this important sustainability dimension. Environmental and social responsibility have become widely studied in our research domain but the spatial consequences of potential decisions are still largely absent. From a research perspective, taking these considerations into logistics decision making will further complicate the trade-offs to be considered. Not only may spatial considerations lead to additional cost, but also other dimensions of sustainability may be negatively affected. For instance, if warehouses are located in more remote areas that are less sensitive to spatial considerations it might lead to additional transportation movements, negatively affecting carbon emissions in transportation. Another consequence might be that consumer surplus reduces due to longer waits for their goods to be delivered.

Both empirical and model-based research in physical distribution and logistics management can help us develop a further understanding of the complexities of such trade-offs. Empirical research is needed to document in detail the effect sizes and underlying causal relationships. Preliminary work in the Netherlands (Acocella et al., 2024) has demonstrated that such data may not be trivial to acquire. Further surveys may help collect such data, but also novel data-collection methods, such as the use of satellite imagery might be explored to further enhance our empirical understanding. In parallel, model-based empirically grounded research (Bertrand et al., 2023; de Treville et al., 2023) is needed to formalize the trade-offs between social sustainability, environmental sustainability, the spatial needs for the physical distribution of goods and business economics. Such modeling work may rely on connecting and combining modeling principles from operations research and spatial economics.

With our paper, we have discussed the important concept of warehousification and developed a framework for potential paths forward. Our aim is to inspire researchers, policymakers and corporate decision makers to further enhance the scope of sustainability in their work. We believe the SHAPE framework can help the logistics industry towards a future in which it can play an important role in society, while reducing its negative externalities.

We acknowledge the financial support this research received from the Dutch Research Council (NWO), via TKI Dinalog, under grant number NWA.1418.22.023.