How Logistics Impact Architecture with Project Manager Jill Ramirez

One of the most important elements of a successful  project is logistics.

In this episode we sit down with TSI Project Manager, Jill Ramirez to talk all things logistics in the architecture industry.  She explains how factors like remote building locations, congested streets, and even bridge height can all greatly impact the transportation of materials to a project site.

Here's a glimpse of what you'll learn: 

• How logistics impact the architecture industry 
• Why unique sites can cost you more money
• Implications of trucking on american infrastructure 
• Waste in the construction industry 
• Project highlight of the week: Concord Wolfehouse!

Link to full show notes

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Transcript

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SPEAKER_00 0:02

Welcome to the Innovative Real Estate Podcast with your hosts Leslie Horn, Brett Crandall, and Claire O'Lilla. We're here to make your life easier as a real estate developer and teach you everything we've learned about designing and building innovative homes, multifamily, and mixed use structures. On this podcast, we'll be giving you our best advice, trainings, and QA segments so you can learn from our years of experience and make your innovative vision a reality. Welcome back, everyone. We have another episode this week where we're so excited to feature our project manager, Jill Ramirez, stepping in for Leslie. And uh, of course, we've also got Breck on the line. We are going to be giving you a behind-the-scenes look today at how logistics affect the industry of architecture. And just before we jump into our project highlight of the week and the conversation for today, I would love to remind you at any point during this episode, if you want to follow along with our show notes, we we've got those linked below, along with some additional episodes that you might like. And if you do want to connect with our team about your project, we've got a contact form that you can go ahead and click as well. So I'd love to just dive on in, Jill. We've got our project highlight of the week, which is drumroll Concord Wolfhouse.

SPEAKER_01 1:22

It's a duplex, the first container building located in Orlando, Florida. It's 960 square feet, and each unit features one full bedroom, one full bathroom, a little living room, and a kitchen area. Um, we're currently under construction for this project, and Breck is about to travel down to Florida. So hopefully we'll be sending containers for this one soon.

SPEAKER_00 1:45

Breck, you excited for your travel?

SPEAKER_02 1:47

Yeah, oh yeah. Anytime I get to go down to sunny South Florida to check out a project. Oh, really cool couple. They uh they wanted to do an accessory dwelling. Um, then they maximize the efficiency by doing two stories instead of one. So it's two separate units, and it's behind an existing house that they already rent. Um, and actually, to our surprise, um, this is like right downtown Orlando, too. They uh the city's really supportive of this entire thing. They're actually really excited. They've had lots of container proposals, but nobody's actually done it. So, Orlando, here we come.

SPEAKER_00 2:19

Orlando, baby.

SPEAKER_02 2:23

Right. Florida's becoming a hot spot for us. Okay, so today we're here to talk a little bit about um some of the stuff that goes on that you might not see day to day. Well, sometimes you see it. Actually, everybody sees it all the time, but you don't know that you're seeing it. There's a logistics behind uh construction, honestly, and architecture, uh, they're all one and the same. We're talking about the industry, it's just uh real estate in general making developments. Let's start on a bigger scale because um let's let's talk a little bit about like material availability uh at its heart. Um, there's two types of materials. There are the materials that you get locally, and there are the materials that you get from overseas. Uh, if you look around you, anywhere you're sitting, most of the things that you're looking at came from overseas. Uh they were transported here because manufacturing obviously kind of took off in countries like China, who develop you know a lot of the textiles, fabrics, materials that we see on a day-to-day basis and use in construction. But then there's like regional availability of materials. So let's take lumber, for instance. Uh, if you live in the Pacific Northwest, you grow Douglas firs. Uh, so Douglas fir is one of the most uh efficient and uh structurally sound materials uh that lumber can possibly offer. I mean, they grow fast, but they grow strong, obviously a renewable resource. Uh, Douglas fir is a fantastic product. So when you see like the timber log homes and you see like big construction with timber going on uh you know in the Pacific Northwest, that's where that material comes from. Of course, we can get that coast to coast, you know, here in Michigan, we can specify that, but it takes uh a lot of energy to move that material from all the way over there to all the way over here, which is why most of the traditionally framed buildings that we see in the Midwest, for instance, are made out of like yellow pine or white pine, um, readily available materials that are grown here. So there's kind of like you got to think like where you are at is going to have an impact on the resources that you utilize. Uh and this goes for all the materials that we use. I just chose, you know, lumber for one. If we talk about concrete, uh we do a lot of poured concrete up here, um, where if you go down south, uh, they just do block construction pretty much everywhere. Uh, so it's it's really just a there, there's a labor factor that that plays a component. But honestly, it's just like where you are located is going to have an influence on the materials and also the construction type that you use. Um, so that's like the biggest picture that we can start thinking about. Now, Joe, we've worked on a number of projects that have been in some pretty unique locations and situations. So I'd love for you to talk a little bit about like what's included if you're going remote, if you're not close to like a big, dense urban area. What kind of impacts and what kind of questions should you be asking yourself as you look at this industry?

SPEAKER_01 5:24

Yeah, so we've had plenty of projects come to us with like everyone wants to have a unique project location. Everyone wants a beautiful view. But some of those things come with making sure you can actually get building materials to your job site. So sometimes we we'll have clients come to us. Um, and we actually prefer that they have a crane company go out to their job site to make sure that they can make it up whatever hill might be there, and let alone get potentially containers there or whatever building construction materials that you need to that job site, make sure your heavy machinery and equipment can actually get there. Um, so that's a big part of it, is just at least a starting point. If you're gonna have a difficult job site, number one, make sure you can get machinery there. Number two, there's also restrictions such as Eagle, um, the entity in Michigan that requires extensive um additional documentation for uh wetlands or sand dunes, etc. So all of those types of things can make your job site very restricted in terms of where you can build, let alone what you're choosing to build with. Um, I think the last thing I'll touch on is a lot of our projects, um, we actually end up having an existing home. So Concord Wolfhouse that we already touched on, there's an existing home in the front, will actually be swinging swinging containers over an existing building into the backyard. So we've had plenty of projects with very tight job sites that we have to think about overhead power lines, um, tight side yard lots, not touching a neighbor's lot. So all of those things come into play to make sure that you can actually build what you're intending to, regardless of what that material is.

SPEAKER_02 6:59

And from like a builder's perspective, so all right, you make a phone call, you're like, we want to build this three-story Airbnb in the mountains of Colorado, and they're like, sweet. And I'm give them a location and they're like, oh, dang, that's way out there. Um, you got people who are building a house, like you're you're pretty much gonna be there every day. At least some of your crew is gonna be there every day. This gets into what is commonly referred to as mobility fees. Uh, if you've ever seen a construction trailer at a job site, you know what I'm talking about. Uh, because they have to basically live in a temporary location in order to make it there versus driving all the way out there and driving all the way home every single day. So, again, goes back to a game of logistics. Like, what's the cost of commuting to a job site versus putting myself up at a temporary location? Uh, my brother-in-law is a construction manager for uh for the big three automotive, and he's actually involved in building battery plants. I mean, we're talking millions of square feet of space. And when they start a new project, they actually relocate all of the site superintendents. So they will they will buy a subdivision or they will buy a plot of land and put up like semi-permanent trailer situations because they know that they're gonna have to live there for two to three years in order to accomplish these projects. So mobility fees and all the challenges that Jill just described all go back to this shouldn't be a surprise to you, uh, an extended timeline and a higher cost of construction. You know, if you're in an area on a flat plot of land and you're right next to a big city, it's gonna be pretty easy to get your materials there and the commute probably isn't gonna make anybody too upset. Uh, but if you want to build way out in the boonies, uh, in addition to some of those like ecological challenges you might have with a unique location and the topographic challenges of the site itself, you're also gonna have some additional costs because it's gonna take a whole lot more for everybody to get their products, materials, and their workers there on a consistent timeline. It also might make challenges in your scheduling, too, because if something gets delayed, you gotta delay everybody on those things. So that's that's something that we just wanted to talk about a little bit. Um, Jill, you touched on utilities, but you you were talking more about existing utilities. So when you're looking at remote locations or really any location, we've talked about this at length, but just give us a refresher on like some of the utility implications that you might have to face in the logistic challenges.

SPEAKER_01 9:42

Yeah. So if you're super remote and there's nobody around you, where are you gonna connect to a power grid? Are you gonna go off-grid? And how are you gonna make that happen? Are you gonna have temporary power set up for your job site so that you can get mobilized? All of those things come into play, as well as getting water out to your job site. So there's been some difficult job sites where we might need a cistern as a tank to actually supply water, um, not only for the actual permanent building that'll go there, but also throughout the duration of construction. Um, so we've ran into those types of issues in places like Arizona, for instance. So, Breck, I think that's actually a good segue for the next talking point that you wanted to start covering is getting utilities into difficult places like that. Did you want to touch a little bit more on your experience there?

SPEAKER_02 10:30

Well, yeah, I mean, utilities are always a challenge, even if you do live on the grid. You know, we've talked about what happens under a building is equally important and almost as expensive as what happens above the ground. So when you go to a really challenging site like Jill brought up Arizona, we know for a fact, I don't think it's a surprise to anyone that Arizona is facing some challenges with water. And we actually uh we're experiencing this pretty much everything west of the Continental Divide is having challenges with water. Now, um, you know, we're we're from Michigan, so we don't have that problem. Um, but the water wars are to come in the meantime. Yeah, uh, if you want to do something like really way out there, you're gonna have a hard time. Um, you know, solar is an option to replace an electrical grid in a lot of situations, but you got to remember if you want to use solar, you have to have a battery to store that power, or you have to use it right as it's being generated. So it could be pretty cost prohibitive. And if you want to tie back into a grid, um, you know, you got to figure out how far that grid is because it's gonna be a cost per like foot to get you to connect to that. Um, septic, not really a problem. Septic fields, you know, it's it's got the big tank, the tank leaches after it's you know gotten rid of a lot of the gunk that's in there, it releases into a field, and the field just kind of it takes care of itself and it returns back to the water table. But water supply, water supply is an issue. And Jill mentioned cisterns. If you're not familiar with the concept, it's like uh it's kind of like how a gas station works. They bury this gigantic container underneath the gas station, and then they have to send trucks to pump the fuel into that, that then people can go to the pump. It's the same concept. You have to bury a tank deep under the ground and then fill it with water. And sometimes those water deliveries are weekly, sometimes it's monthly, but you have to pay a truck to come and refill it. Just like if you live way, way up north, you probably have a propane tank and you probably have to call somebody once a year to come and fill that tank. Now, one of my favorite examples of this is the great land rush of Joshua Tree. Now, if you know somebody who has a little bit of uh expendable income or they're doing pretty well, or you're listening to some influencers, you've probably heard somebody mention that you can get land real cheap in Joshua Tree. Well, there's a darn good reason for that, and it's because the land's completely unbuildable because there's absolutely no grid to get to you. And there's no general contractors who are willing to travel out into the desert every single day and to work in 109 degrees in order to build your house. So I actually personally know at least one person who went through and purchased land, uh, and he he learned the lesson real quick that there was nothing that he could do with this land, and now he can't sell it off either. So he's kind of stuck. He got a little thrifty though, I'll give him credit. Um, he actually ended up making a cacti farm on it, and so he drives out there a couple times a year, loads up with like exotic cacti, and then drives them back to the Midwest and then sells them. So he's he's making the best with what he got. But if it sounds too good to be true, well, it generally is. Okay, so we have to move things. So let's talk about the moving of things, and I'll again start on the bigger picture and then I'm gonna hand it over to you, Jill, because I know you are the logistics queen here at Three Squared Inc., and so you get to deal with these conversations pretty frequently. Um, but here's where it's it's always around you. And after I say this, you'll never be able to drive on the freeway the same again because you will see shipping containers on trucks everywhere. Those containers are carrying goods, products that we use for services and for construction. All materials, like I said, around you. Tap on a countertop if it's from IKEA, it came from overseas. All of the flooring that you have underneath your feet, most of the trim, a lot of the paint materials, like all this stuff is coming from overseas, and it's shipped here in shipping containers. And so those shipping containers are large objects. When you're in a port and you're taking them off of the ship, it's very easy to move these because they're uh they're a modular object, right? They're all the exact same. And so you have the system of picking all those pieces up, dropping them off, and moving them around. Once they hit that point, now we have to get those very large heavy objects, and we're talking like 10,000 pounds plus unloaded. So it could be 40, 50, 60,000 pounds in each one of these boxes that's then sent on it, put on trucks, on trains, or on inland waterway ships and then sent all over the country in order to distribute. So where we leave the ships, we now pick up at probably the most common is trucking. And so, Jill, I'll hand it over to you because we know that we got to move these things from point A to point B.

SPEAKER_01 15:30

Yeah. So a huge part of the trucking conversation is what size containers are you looking to move? Are you looking to move a 40-footer or a 20-footer? Because you can fit two 20-footers on one container or on one truck. And the reason behind that is a 20-foot container is actually only 19 foot, 10 and a half inches long. So you can get both of those containers onto a truck, but what type of truck are you specifying? Because you're going to need onloading or offloading equipment or both. If you're using 20-footers, you can pull one on, but then how are you going to get that second one on once the first one's on there? So a lot of times you need additional equipment to actually get the containers onto the truck, let alone get them to the job site. So it's a lot of logistics there, as well as coordinating worst-case scenarios. We've seen it happen all the time where maybe a truck breaks down. So you've got to have containers to a job site in a very specific order. So we have containers laid out. So you need your first floor to show up before your second floor. So what if the first floor containers break down and your second floor shows up first? You've got to have a backup plan to get another truck there to assist with getting your containers to the job site. Um Brack, I don't know if you want to contribute anything else to the trucking conversation. Um, I guess my last thought that I'll share here is a lot of the container brokers that we work with actually have transportation partners. Um, but what we've run into is there's a lot of transportation partners that have shortage in the specific equipment that we need. So we prefer to use tiltbed trucks because those are easier for onloading and offloading containers. Um, a lot of ports actually have more access to a flatbed truck than a tilt bed. So those are some of the challenges that we've run into on uh quite a few projects, but more so recently.

SPEAKER_02 17:12

Yeah, I mean, when you're leaving the yard, they have big machines that could just pick that box up and set it on the back of the truck, right? Piece K. Um, same goes for like steel. I mean, you see like big bridges being constructed. I mean, there's a lot of road construction across the U.S. right now because you know our infrastructure's been aging for some time. Um, here in Detroit right now, we're actually working on an incredible project. Uh we are not, but um, the country of Canada and the United States are collaborating on the biggest civil engineering project in the nation right now, which is the Gordy Howe International Bridge, which will bridge Windsor, Canada to Detroit, Michigan. And um, we're seeing construction for that nonstop. They're bringing massive pre-cast concrete beams, um, huge, huge steel pieces that are making chunks of the bridge or just the highway interchanges that go to that project. And um, so onloading is one thing, but offloading is a totally separate conversation, which we'll get to in a minute. But you also have to think about like how big are the things that you're trucking around, uh, because there are a lot of restrictions on the road. There's this thing called bridge heights. One of my favorite YouTube channels is called the 11 foot bridge. Um, and it's under a railroad, and this guy lives across the street from it, and he just has a camera going on a live stream all day, and it's like multiple times a week a truck hits this bridge, just like demolishes the their truck, like hitting this bridge almost nonstop. There's nothing they could do about it. Like, apparently, civil engineering couldn't touch this one. Uh, but you have to think about the height restrictions of what you're transporting. Sitting here in our office, I'm watching beams that are probably 16 to 18 feet tall coming down our side streets because they can't go down the freeways. So they actually have to plan how to get these massive pieces of building and construction to the job site because they can't take traditional routes. Ask yourself, why is the bridge height restriction what it is in the United States? Shipping containers. It's shipping containers on a truck bed. Truck beds usually like three and a half foot tall, shipping containers nine and a half feet tall. Like you got your minimum right there, uh, like a 13-foot bridge to 14-foot bridge is pretty common. And if it's below that, you'll see warnings. And uh, I have seen instances where a truck saw the sign and knew it couldn't make it under and just had to stop dead in its tracks on the freeway and then back up and on ramp because they had to get out of there because they didn't plan the logistics of getting it from point A to point B. Okay, so now we get to probably the final piece of the puzzle, which is you got to get the stuff off the truck. This goes for containers, this goes for steel pieces, this goes for concrete, timber, you name it. When you get to the job site, you got to pull something off the truck. So, Joe, I'll throw it back to you again. What do we know about crane and rigging and some of the implications and challenges there?

SPEAKER_01 20:17

Where do we even start? Because there's a million things on this list here. So I think I'll start with um one of the exercises we actually go through is analyzing a site plan and working with the crane and rigging crew to say, here's the best place to locate the crane to set it up when we're offloading equipment on the job site. No matter what the equipment is, we need to know the best place for the crane to set up. And sometimes that's in the street, which might require street closure, which might require a permit to do so. So all of those things have to be discussed. We have to talk about the reach of the crane, where are the trucks drop dropping off the equipment so that the crane can actually reach that equipment? What time is the crane gonna get there? Because the crane operator also is limited on the hours that they can be on the road. They're not allowed to drive past sunset. So if they're gonna be at the job site for a full day, they are gonna have to set up shop and stay overnight somewhere, have their crane parked somewhere and be able to mobilize the next day. So all of those things come into play in adding up the cost of what it's gonna be for the amount of hours that you'll have a crane and rigging crew on your job site. So once the crane is gets to the job site, they actually have a process of setting up the spreaders, getting everything leveled, getting their counterweights set up, and then you would bring in whatever material you're looking to move with the crane. So you'd have to coordinate those final pieces of the material showing up to the job site at the correct time in the right order to be able to move it and have the right crew set up. So you need certified people to do this.

SPEAKER_02 21:48

So in review, then from the top down, you have the initial movement of materials from point A to point B. That's just the first step of the journey. We talked, some of this comes regionally, a lot of this comes internationally. The movement of ships is impacted heavily by global logistics. Uh, we all remember the stories of all the ships getting stuck outside of the ports uh during the midst of the pandemic. We of course remember uh the ever-given getting stuck in the Suez Canal. All these things affect products getting from point A to point B. Um, so there's some major logistics on a global international scale to start things off. Once they reach your port, then you have to get them out of there. And we again remember how prices were soaring on products and materials for construction for a time there because we couldn't get trucks into the ports. Now that was for a number of reasons. Uh, it started because of the trucking schedule, which was overridden by an executive order, and then it became uh an environmental concern for some ports in California. I actually wouldn't let trucks into the ports that exceeded their uh their environmental impact requirements um for for their uh for their off-gassing. So there's a there's a lot of complicated pieces to this puzzle. But then once you get the trucks to pick up the material and they start moving it around, then it goes to manufacturing plants. The manufacturing plants take the raw material, turn it into the finished material, then contractors pick it up and move it to a job site, and then the contractor's team has to show up and start working on the job site. There's a whole line of these things. And so, what I want to leave you thinking about is what is the impact of moving all of these pieces all of the time? There's clearly an environmental impact on what we're doing here and how the logistics of construction work. And we also know that construction waste is the number one producer of garbage on planet Earth, which is another environmental impact that we've talked about on other podcast episodes. But today I just want you to think about the next time you see that shipping container port with thousands of these things stacked up, and the next time you see a shipping container or a load of trusses for a house driving down the freeway next to you, or you see a mobile home getting escorted because it's got the oversized whiff, and so it's got a convoy in front and back. Just think about how are we moving products and materials from place to place? And the only solution that I think that we can really grasp right now is that as we've discussed before, the future of construction is moving to building in more of a prefabricated nature, wherein we're building larger pieces of buildings off-site, whether that's the whole building, whether it's an entire apartment unit, whether it's building larger wall panels that already have the finished materials on the exterior, and you've got your windows in. There's a lot of layers here, but eventually we will be building buildings more like the way we build airplanes and cars and a lot of the other stuff, where it rolls out of the factory because all that raw material is brought to one place. We're not bringing a million different pieces to a job site and then slowly assembling all these pieces. We're just taking it to one place that can then distribute and cut down a lot of those resources that we use to move things all over the place in architecture and construction.

SPEAKER_00 25:37

There are episodes that we record where I just get to sit back and learn. And this was definitely one of those episodes.

SPEAKER_02 25:46

And Claire, do you have anything to add from your I know you had like a background in some environmental aspects? And so, I mean, do you do you have any like finishing touches to the conversation we've had today at large?

SPEAKER_00 25:56

Well, this is what I get so excited about with the new products that we're incorporating into some of our pro into some of our projects is these efficiencies, because um, we recorded an episode a couple episodes back on the hidden costs of building and more of the long-term impacts of these choices that people are making in their developments. And it's so overlooked, but so critical as we continue on in the future of building. So I'm really excited as we get building on some of these projects that we're planning to incorporate, these high-efficiency products, and have some real proof to show for people because it's really exciting stuff. I also find it really interesting for anyone listening. If you really picked up on that conversation around where you're choosing to build, because some of these really remote sites can be really beautiful, but there's so many implications if it is remote and out of the way. Like, how are you realistically going to be getting your utilities there, building products there, and the costs that are associated with all of that? So it's a really interesting conversation. And my last question would be just if you have any advice for somebody if they're in kind of that tug of war on where to build, if they're between two pieces of land. We've talked in a previous episode on a couple of red flags people might be able to look out for for a site that could be really challenging. What might be just a really easy way to sum up just a couple of red flags that might make a piece of land really expensive to build on?

SPEAKER_02 27:32

If it sounds too good to be true, it is. If you think you're the first person that found this hidden gem that's got this beautiful valley in front of this lake to yourself and it's way underpriced, buyer beware. That's probably gonna bite you. Jill, anything else you'd like to add?

SPEAKER_01 27:53

I think when there's a will, there's a way, but it also has a huge implication on how much are you willing to spend to make it happen. So is it realistic in your project budget to make a really difficult job site work? Sometimes really expensive things will work on a job site, but do you have the budget to make that happen?

SPEAKER_02 28:12

And lastly, don't trust other people's word. They're trying to sell you the property. You have to do the diligence for yourself.

SPEAKER_00 28:23

Wow, that was some really good uh good cop, bad cop right there with those answers. Awesome. Well, thank you guys so much for listening. We'll be back in uh two weeks with another episode. And please go ahead and take a look through our content library. We've got dozens and dozens of episodes now with such good information and trainings, honestly, for you. If you're newer to the development game and if you've got land, if you're ready to move forward, go ahead and hit the contact form below and we'll connect you with the right member of our team to get you started. Thanks so much, everybody. Have a great day. We'll see you in the next one. We hope you enjoyed this episode. And if you found it so valuable you want to connect with us one-on-one, click the link in the description to tell us all about your project so we can help you get started. And to get notified on the next episode here on Innovative Real Estate, go ahead and subscribe to the podcast on iTunes so you never miss a beat. Get out there, put today's advice into action, and we will see you in the next episode.