When it comes to advances in material handling equipment, storage racking is probably the last category that comes to mind. But experts would challenge that notion in light of today’s modern warehouses and distribution centers, which require diverse storage solutions that can meet varied picking requirements and function alongside a growing array of robotic and automated systems. Such changes are creating the need for innovative storage solutions that can seamlessly integrate with automated technologies and contribute to the primary objective of the modern warehouse: faster throughput and more efficient operations.
To that end, rack manufacturers are taking this warehouse staple to the next level with flexible designs that can accommodate shifting needs. Increasingly, rack manufacturers are designing scalable solutions that combine standard pallet rack with products such as pallet flow rack, carton or case flow rack, and automated storage and retrieval systems (AS/RS)—all under the same roof. Here’s how.
Pallet rack is the most common form of storage in warehouses and DCs, and it serves as the starting point for most modern systems, according to experts at rack manufacturing company Steel King.
“Everyone’s pallets need to sleep somewhere at night,” explains Raymond Weber, regional sales manager for Steel King. “Pallet rack is the place to start. And it can be configured to handle numerous items.”
Those pallets of product are often broken up into smaller units—boxes, cartons, and single items—to fill orders. To accommodate those demands, a system designer will often start with pallet racking and then add other types of racking based on the customer’s applications and workflow. Pharmaceutical and health-care industries provide a good example. Customers in those sectors rely on a first-in, first-out (FIFO) system—which means that products produced or acquired first are sold first, due to the expiration dates on medicines and drugs. This often calls for a pallet flow racking system, which is a high-density storage solution in which pallets are loaded from the rear of the system and move forward along a pitched track of wheels. Systems can be configured to handle pallets just a few layers deep or scaled up, depending on the facility’s needs. When a pallet is removed from the system, the remaining loads roll forward.
Pallet flow racking not only helps condense storage by eliminating aisles in a warehouse but also creates a natural FIFO system. And it can be converted to carton or case flow, in which smaller units flow through the system in essentially the same way, Weber explains. He says combining such systems under one roof is increasingly common in today’s warehouses and DCs.
“[It may be that] 80% to 90% of a warehouse is for bulk pallet storage, but then you get into some areas of pallet flow and some areas of ‘eaches’ [single-item picks],” he says. “You start with this massive warehouse full of everything, and you need to go from pallet to case to individual [item].”
John Clark, Steel King’s director of marketing, agrees, and adds that the ability to change or alter a system is important as well.
“You have to consider, if you put up pallet racking, how easy is it to convert pallet storage to case storage in your operation?” he says, noting that many warehouses are dealing with a larger volume of smaller orders these days, thanks to accelerating e-commerce activity and the need to serve a wider array of customers. “Facilities need the flexibility to handle all that.”
Weber points to health-care company Medline, a Steel King customer, as an example. The manufacturer and distributor of medical and surgical supplies sells to institutions, businesses, and consumers and recently built a giant DC that features a variety of racking solutions to accommodate its fulfillment needs.
“You go all the way from full pallet loads [down to single items], where they can actually pick one tube of toothpaste,” Weber explains. “E-commerce has driven so many things. Warehouses used to be 100,000 square feet, 200,000 square feet … Medline just completed a 1 million-square-foot DC in Illinois. We also know that Amazon and Walmart can do over 2 million square feet under one roof. It’s the economy of scale.”
And the trend is here to stay. The market for industrial racking systems is set to grow to $16 billion by 2029 from $11 billion in 2022, a roughly 6% compound annual growth rate, according to a late 2022 report from research firm Fortune Business Insights. Global demand for more modern warehouse space that can accommodate increasing e-commerce volumes is a driving force, according to the research.
In addition to being called upon to create systems that include a wider variety of storage solutions, rack manufacturers are also being challenged to integrate those systems with a growing array of robotic technologies on the warehouse floor. That includes creating traditional systems that form the backbone of the warehouse and “feed” the automated equipment as well as those that work alongside it.
“People have to take into account [that] in order for an automated section of a facility to work, the areas upstream and downstream have to have their houses in order,” Clark explains. “It’s an ‘islands of automation’ approach, but you have to have bridges to make it work.”
Weber points to today’s larger facilities to illustrate the point.
“In years past, warehouses were 25 feet tall, and forklifts only reached four or five [levels] high,” he says. “Now, we’ve done projects where the rack supports the building. It could be 125 feet tall inside, with automated cranes.”
Such an operation calls for higher rack tolerances to withstand the required support for the building as well as the interaction with cranes, he says.
Chris Williamson, vice president of rack manufacturer Unarco, points to the integration with AS/RS technology as a common design requirement—especially in pharmaceutical facilities. Unarco supplies racking for both unit-load AS/RS, which are large systems that store pallets, and mini-load systems, which are smaller and can move vials and bottles stored in totes or trays. A systems integrator will combine the racking with automated equipment that moves the pallets, totes, or trays into and out of storage. He says the automated systems have been used in European pharmaceutical warehouses for years and are now more common in the United States.
“This sector has picked up a lot of steam,” Williamson says, pointing to the need for increased efficiency as the main driver. He notes that there’s growing pressure on operations using pallet racks to find ways to automate the movement of materials and free up workers for more value-added tasks, such as picking. “Everyone is looking for a better way to do things. At this point, it’s all about the lack of available labor and finding a more efficient way to get [products] from point A to point B.”
The Fortune Business Insights research supports those points, noting that end-users’ need to optimize storage space, speed throughput, and address labor challenges will be a prime driver of industrial rack industry growth over the next six years.