“We’ve created a third way to do this, which is programmatic logistics, enabled through our tech platform that is connected to a broad open network of operators so the customer can plug in once to the tech platform and have access to warehousing and fulfillment anywhere. On-demand warehousing, he says, is an alternative and nimble way to achieve the desired network. Yet, by tapping into an on-demand partner, they can achieve the network they’re after, says Siebrecht, without having to negotiate with 3PLs who insist on long-term contracts. “There is a tremendous amount of underutilized space in some of these warehouses, but … in a world with the Flexe model, that underutilized space can be monetized immediately,” Siebrecht says.įor shippers/brands, the value of the on-demand model is that they don’t have to build out or lease warehouse space of their own, which can be highly challenging to plan and budget for given the difficulties of accurately predicting demand over a multi-year horizon. With warehouse space being tight, many organizations are “gobbling up” existing space, even if the warehouse is bigger than initially needed, Siebrecht says, which leads to the irony of underutilized facilities during a space crunch. Importantly, this funnels new business to warehouse partners and helps them achieve better space utilization, explains Karl Siebrecht, CEO of Flexe, a pioneer in the on-demand category. These on-demand players have differences, but one thing they mostly have in common is that they bring in 3PLs or other operators as partners to build up the network reach they can offer. Of course, 3PLs that offer warehousing stand to benefit from the same pressures, but the newer players say they differ when it comes to characteristics like paying for services as needed, Cloud-based software support and aggregating demand across warehousing partners. The warehousing on-demand segment has been around for several years, but the current market conditions are presenting these companies with a unique moment: high e-commerce growth, a shortage of space and all sort of retailers, brands and consumer goods companies scrambling to get better at e-commerce fulfillment. Given that new warehouses often take well over a year to build and bring online, and many companies are eager to either hold more inventory now or revamp their networks to position inventory closer to e-commerce customers, the times are ripe for providers who fall into the “warehousing on-demand” services segment or otherwise provide warehousing services. Interact Analysis estimates e-commerce growth will trigger an additional 28,500 warehouses to be brought into service globally by 2025. Other researchers also predict an acute need for more DC space. Traditional retailers, third-party logistics companies and others will also be demand catalysts.” It’s important to bear in mind that e-commerce is only a portion of the overall demand for distribution facilities. and global markets will be to produce enough new facilities to meet this rapidly expanding market. “Moving forward, the challenge in many U.S. “While there is a sizable construction pipeline in the United States, much of that new space is already leased to meet the demand of the past few years,” James Breeze, senior director and global head of industrial and logistics research for CBRE, said in explaining the CBRE space estimate. The continuing e-commerce boom, along with the supply imbalances linked to the pandemic, have a lot to do with that need. It can’t be visualized like port congestion with a fly-over, but it’s for real, especially for key logistics nodes and lanes used to import consumer goods.Īccording to research from industrial real estate company CBRE, the United States will require an additional 330 million square feet of distribution space by 2025. The historic level of port congestion playing havoc with supply chains is grabbing loads of attention but, at the same time, a massive warehouse space crunch is going on.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |