CATEGORY
Warehousing Services
A warehouse is a building for storing goods. Warehouses are used by manufacturers, importers . A warehouse can be defined functionally as a building in which to store bulk produce or goods (wares) for commercial purposes.
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Warehousing Services Industry Benchmarks
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The average annual savings achieved in Warehousing Services category is 4.00%
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(in days)
The industry average payment terms in Warehousing Services category for the current quarter is 58.1 days
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Warehousing Services market report transcript
Global Warehousing Services Industry Outlook
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The global warehousing market was expected to be valued at around $245 Bn in 2020, and is forecasted to grow at a CAGR of 7% from 2020 through 2024, valuing around $326 Bn by 2024.
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Europe, North America, and APAC countries including Australia and Singapore, have high market maturity owing to tight supply conditions and higher technology adoption.
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Parts of APAC, such as India and China, are expected to be the future growth driving markets for the warehousing industry owing to a forecasted increase in manufacturing facilities, a high number of top container ports, and robust growth of the e-commerce sector, which will grow from $97 Bn in 2020 to $143 Bn in 2024.
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There are three levels of market maturity in the industry and this report categorizes the entire warehousing market into – High Market Maturity, Medium Market, and Low Market Maturity countries.
Brexit - Impact on Warehousing
Rise in warehouse operating cost
Impact Area: Warehouses operating in the UK
- Post the exit from the European Union (EU), the UK is expected to see a rise in wage rates, which was a major social plank during the referendum.
- A mandatory wage rise will impact labor costs, which account for nearly 40-60% of the total warehouse costs.
- Any rise in wage rates will directly impact the warehouse costs, which, in turn, will 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
- The 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 automated guided vehicles (AGVs), pick to light, and voice-directed picking is gaining momentum as most warehouse occupiers are accommodating their distribution centers (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 encouraging retailers to invest more in warehouse space.
- The increasing shift towards a centralized distribution model is resulting in an increased demand scenario for modern Class A warehouses across the globe.
- Currently, warehousing service providers are offering value-added services such as labeling, packaging, and palletizing to enhance and complement service offerings.
- Over the next few years, industrial warehousing will grow in India's manufacturing facilities across eight cities - Mumbai, NCR, Pune, Bengaluru, Chennai, Kolkata, Ahmedabad, and Hyderabad. These cities house 211 million sq. Ft (as of 2019) of quality warehousing stock. The stock is projected to climb to 253 million sq. ft and further to around 300 million sq. ft in 2021. The Indian logistics and SCM (Supply Chain Management) industry is valued at $165 Bn, with the number expected to grow at a good pace.
- These major global warehousing market trends are setting high hopes for service providers.
Warehousing Services Drivers and Constraints
Drivers
Economy:
- Global manufacturing production rose almost 2.4% in 2016 and picked up the pace and grew in the remaining months, leading to more demand for warehousing facilities in the subsequent years.
- The global GDP grew by approximately 3.5% in 2016 and 3.8% in 2017 thus creating a positive economic environment.
Growing Retail and E-commerce Industry:
- The e-commerce boom has led to an increase in demand for warehouse space from third-party logistics (3PL) across the globe and will grow at a faster pace in emerging economies such as India and China. Expansion of retail chains and their dynamic growth is expected to further push the demand for warehouses in the upcoming years.
- Further, enforcement of physical distancing norms, lockdowns, and other protocols in response to the COVID-19 crisis has influenced consumers to shop online. This behavioral shift has triggered a spike in business-to-consumer (B2C) and business-to-business (B2B) e-commerce sales in household goods, pharmaceuticals, and food products. An increasing number of online platforms is influencing consumers' buying patterns. Companies functioning in the e-commerce industry are speeding up their order placement and shipping processes to remain competitive.
- Such trends have resulted in the large-scale implementation of real-time warehousing services solutions for effective order processing, packaging, shipment monitoring, and route planning.
Constraints
- Across emerging regions, the availability of Class A warehouses is limited to only a few countries such as India and China thus hindering the adoption of hi-tech 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.
- Warehouse management systems require continuous maintenance and optimization in routine cycles to ensure proper operation. The COVID-19 pandemic has compelled various governments across the globe to impose nationwide lockdowns, leading to labor shortage in warehouses.
- SMEs that bank on traditional warehousing services are taking a hard hit due to the absence of a trained workforce to manage maintenance activities. SMEs contribute significantly to the global warehousing market, especially in developing regions. This will trigger a short-term slump in demand for warehousing services in these regions.
Cost and Pricing Analysis
The warehousing industry report contains the cost and pricing analysis of the different pricing models as well as the pros and cons of each in detail. Also, it explains the difference in cost and pricing across geographies. Further, the report offers an independent analysis of the developed and developing regions in the warehousing services market.
Procurement Best Practices
The report details the procurement practices, sourcing models, and the types of contracts and agreements that are used in the warehousing industry. The pros and cons of the different sourcing models are also detailed. The key performance indicators of the global warehousing industry are described.
Why You Should Buy This Report
The report consists of the analysis of the global warehousing services market size, demand-supply analysis, and trade dynamics of global and regional markets. Moreover, the report elaborates all the historical trends in the global warehousing services market price and the factors driving the same. Various geographic regions and their inner dynamics such as price trends, logistics services, market dynamics as well as market maturity are also explained in the research study.
Moving ahead, the global warehousing market size study has scrutinized prominent countries that offer large-scale global transport and warehousing facilities and their revenue share. If there is anything unique to differentiate one region from the other in the global logistics & warehousing services market, they are detailed. The global warehousing market report gives Porter’s five forces analysis of the major warehousing markets.
The cost analysis section of the report studies the global warehousing services market price from the global as well as regional perspective. The report lists out global warehousing services market industry suppliers, drivers and constraints, and price analysis, as well as provides the SWOT analysis of major suppliers. It also offers information about market aspects such as warehousing services, logistics and transportation, storage services, fulfillment center, distribution center, deport storage, bonded storage, public storage, third-party storage facility, leased storage, rented storage, automated warehouse, WMS, VAS, ASRS, and AGV. The industry report provides the global services warehousing market size analysis and cost structure breakdown and lists the best sourcing and contract models for manufacturers and distributors.
Further, the global warehousing services market report talks about the innovations that aim at reducing costs while making the industry more sustainable in sync.