Warehousing Services Market Intelligence

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  • PRO access to New Beroe LiVE*
  • Unlimited updates on the Report*
  • Supplier Watchlist for 3 suppliers*
  • Supplier Shortlisting Tool*

With this purchase you will be subscribed for a 12-month PRO membership to the upcoming all new Beroe LiVE (launching in Q3, 2020)

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*These features will be unlocked on the new Beroe LiVE when it launches (Q3, 2020)

Report Coverage

  • Global Warehousing Services Industry Trends
  • Supplier Trends and Insights
  • Mergers and Acquisitions
  • Global Supplier List and Service Capabilities

Market Size

Market Size North America

$170 Bn

Market Size Europe

$346 Bn

Market Size Asia Pacific

$ 1,249 Bn

Market Size Latin America

$ 47 Bn

Table of contents

  1. Warehousing Services Executive Summary
  2. Warehousing Services Market Analysis
  3. Warehousing Services Supplier Analysis
  4. Warehousing Services Cost and Pricing Analysis
  5. Warehousing Services Procurement Best Practices

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Global Warehousing Services Industry Outlook

  • The global warehousing market was valued at approximately $1.9 trillion in 2018 and is expected to grow at a CAGR of around 6-8 percent to around $1.9 trillion by the end of 2019
  • Regions, such as Europe and North America and some parts of APAC, including Australia and Singapore, have high market maturity due to tight supply conditions and higher technology adoption
  • Parts of APAC, such as India and China, are expected to be the future growth driving markets for the warehousing industry owing to the forecasted increase in manufacturing facilities, high number of top container ports and due to the expected robust growth in the e-commerce sector, which is expected to grow from $1.7 trillion in 2017 to $1.8 trillion in 2018

warehousing-global-market-size

Brexit - Impact on Warehousing

Rise in warehouse operating cost

Impact Area: Warehouses operating in the UK

  • Post the exit from the EU, the UK is expected to see a rise in wage rates. The rise in wage rates was a major social plank during the referendum
  • A mandatory wage rise will impact labor costs, which account for close to 40-60 percent of the total warehouse costs
  • Any rise in wage rates would directly impact the warehouse costs, which could in turn lead to a rise in prices

Action Item:

  • Clients need to look at price absorption clauses to shield them from any potential rise in prices

Impact on Distribution Centers

Impact Area: Distribution centers in the UK and Europe

  • UK has comparatively high rental rates coupled with a less strategic location in Europe. Hence its location attractiveness for centralized European Distribution Centers (EDC) will reduce in the near future
  • Companies that currently have Centralized European Distribution Centers (EDC) in European Union will have a minimal impact due to the BREXIT as most of them are located across countries like Germany, France and Benelux

Global Warehousing Services Market Maturity

  • Europe and North America show higher service provider maturity due to high technology adoption levels and a wider range of services offered. Emerging countries, such as Brazil, India, China and Japan, show low to medium maturity due to lower 3PL penetration rates and lower adoption of warehouse technology

Global Warehousing Services Industry Trends

  • Adoption of technology in warehouse management functions, such as AGV, pick to light and voice directed picking, is emerging, as most warehouse occupiers are accommodating their distribution centres (DC) towards faster response times and space-saving, efficient systems with minimal labor requirements
  • Increasing service levels, such as same-day delivery and e-commerce, are leading retailers to invest more in warehouse space
  • Adoption and shift towards centralized distribution model results in an increased demand scenario for modern Class A warehouses across the globe
  • Currently, warehouse service providers are offering value-added services, such as labelling, packaging and palletizing, to enhance and compliment service offerings

Warehousing Services Drivers and Constraints

Drivers 

Economy:

  • Global manufacturing production rose almost 2.4 percent in 2016, and it is expected that manufacturing will pick up pace and grow in the remaining months of this year, leading to more demand for warehousing facilities
  • The GDP is set to grow by approximately by 3.5 percent in 2016 and 3.8 percent in 2017, thus, creating a positive economic environment, leading to an increase in demand for warehouses

Growing Retail and E-commerce Industry:

  • The growth of e-commerce has lead to an increase in demand of warehouse space from 3PLs across the globe and will grow at a faster pace in emerging economies, such as India and China.
  • The expansion of retail chains and their dynamic growth is expected to push the demand for warehouses in the upcoming years
  • Disposable income, growing at 2.3 percent among the general public, has been creating demand for consumer goods along with increased imports and exports. The growth of retail and FMCG goods has been the main driver for the industrial warehouse industry

Constraints 

  • Across emerging regions, the availability of Class A warehouses is limited to only a few countries, such as India and China. Hence, it hinders the adoption of higher technology levels as well as best-in-class KPIs
  • The unavailability of skilled labor in regions such as North America and Europe, along with less expertise in the warehousing field, keeps wages relatively high, which impacts overall operating costs

Warehousing Services Market Frequently Asked Questions

  1. What makes India and China the key growth driving markets in the warehousing industry?
  2. Certain parts of the APAC region like India and China are considered to be the future growth driving markets for the warehousing industry due to forecasted increase in the manufacturing facilities, a high number of top container ports, and due to robust growth in the e-commerce sector.
  1. What are the three levels of maturity in which the countries are categorized w.r.t the warehousing industry?
  2. According to Beroe’s report, the entire warehouse market is categorized into 3 levels namely – High Market Maturity, Medium Market, and Low Market Maturity countries. The bifurcation stands as: High Market Maturity countries – includes the U.S., the U.K., France, Germany, Belgium, Singapore, and Australia Medium Market Maturity Countries – includes India, China, Brazil, Poland, South Africa, and Dubai Low Market Maturity Countries – includes New Zealand, Argentina, and Chile
  1. What is the average contract duration and payment period prevalent in the warehousing market?
  2. The minimal contract duration is of one year, the average being three years, and the maximum contract duration in the industry is for five years. Again, the usual payment period is of 30 – 45 days.
  1. Who are the top global service providers in the warehousing industry?
  2. As per Beroe, the top global service providers are: C.H. Robinson CEVA Logistics DHL Supply Chain DB Schenker Logistics Kuehne + Nagel UPS Supply Chain XPO Logistics
  1. What are the two major cost components prevalent in the warehousing industry?
  2. The two major cost components include the following: Labor cost (30 – 35 percent) Warehouse rental (25 – 30 percent)
  1. What are the four main KPIs that influence a majority of warehouse services?
  2. The four main KPIs that influence a majority of warehouse services include: On-time shipments Total order cycle time Perfect-order completion index Dock-to-stock cycle time
  1. What are the different pricing models of the warehousing industry?
  2. According to Beroe's report, there are three pricing models within the warehousing industry: cost-plus margin, transactional pricing and activity-based costing.
  1. What are the key driving factors for warehousing services?
  2. The rise in economy, improvement in GDP, growth in e-commerce, retail industry, and FMCG goods are some of the known factors that drive a majority of warehousing services.
  1. Which are the three main sourcing models in the global warehousing market?
  2. As per Beroe’s report, the three sourcing models are: Lease and operate Built-to-suit Outsource to 3PL
  1. Which countries hold the largest and the smallest warehousing market size across the globe?
  2. The largest warehousing market size is captured by the APAC region with a valuation of $1,249 Bn, followed by Europe ($346 Bn), North America ($170 Bn), and the smallest market size is with Latin America having a valuation of $47 Bn.
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