A classic supply and demand scenario encompasses the world’s warehousing and logistics industry as the need for warehousing space rapidly climbs.
According to a recent article in the Journal of Commerce, available warehouse space in the United States continues to diminish at a rate of more than 20% year-over-year. Other countries like China report that warehousing space is at a premium, often making it unaffordable for some companies.
What’s causing the warehousing shortage?
At least two major factors cause the need for more warehouse space. For one, wholesalers must ship goods in bulk to stores for resale. While not a new phenomenon, when added to the drastic increase in e-commerce sales, the need for warehouse space is ever growing.
We at On Time Logistics recently moved to a new location that more than doubled our warehouse space, which allows us to better serve clients. We were fortunate enough to find space that fit our needs in Northwest Arkansas but other companies are not as fortunate. Even with the additional space, we find that our warehouse space is already becoming increasingly limited.
How can we get more warehouse space?
We expect more warehouse construction in coming years in Northwest Arkansas and surrounding areas. Warehousing will probably not look the same as construction continues, however.
With land space also becoming increasingly scarce, more builders are choosing to build up instead of out. In other words, they are increasing their warehouse space by constructing taller buildings instead of warehouses with a bigger footprint.
According to the Wall Street Journal, most recent warehouse construction has been for structures with ceiling clearances between 28 and 36 feet with some (less than 10 percent) of the warehouses having 36 to 40 feet. Twenty-five years ago, the average clearance was 24 feet and it’s steadily grown since then.
Another option, while admittedly less appealing for most companies, is still viable in some cases. That would be taking older spaces, gutting them, then retrofitting them to create warehouse space.
This can be costly, but for smaller inventories or inventories that may not require as much hands-on management, this can be an excellent solution. With logistics technology allowing retailers to manage their inventory online, fewer complications exist when using older buildings.
Need to consider how you manage your inventory? Give us a call today and we’ll create a warehousing and fulfillment solution that best fits your needs.