Public warehousing is a crucial component of the supply chain industry, providing businesses with the necessary infrastructure to store and distribute their products. With the rise of e-commerce and globalization, the demand for public warehousing has only increased in recent years. In this editorial, we will explore the current state of the public warehousing market and what businesses can do to stay competitive.
Firstly, it’s important to understand the different types of public warehousing. There are two main categories: contract warehousing and multi-client warehousing. Contract warehousing is when a business contract with a third-party logistics provider to exclusively manage its warehousing needs. Multi-client warehousing, on the other hand, is when a logistics provider manages multiple clients in the same facility, often with shared resources and personnel.
While contract warehousing provides businesses with dedicated resources and specialized services, multi-client warehousing offers greater flexibility and scalability. This is particularly beneficial for businesses with fluctuating demand or those looking to test new markets.
Regardless of the type of warehousing, businesses should prioritize choosing a provider with a strong track record of reliability, efficiency, and security. The provider should also have a robust technology infrastructure, including warehouse management systems and data analytics tools, to enable real-time visibility and optimize inventory management.
One of the major trends in public warehousing is the use of technology to improve efficiency and accuracy. With the increasing adoption of cloud computing, automation, and artificial intelligence, warehouse operators are now able to manage inventory, track orders, and streamline processes more effectively. This has resulted in a significant reduction in operational costs and an increase in overall productivity.
Another trend in the public warehousing market is the rise of automation and robotics. With labour shortages and increasing demand for speed and accuracy, logistics providers are investing in top-end technology to reduce costs altogether. Automated storage and retrieval systems, conveyor belts, and autonomous mobile robots are just a few examples of the technologies being implemented in warehouses.
While these technologies offer numerous benefits, they also require significant upfront investment and ongoing maintenance costs. Businesses should carefully evaluate the costs and benefits of implementing automation and determine whether it aligns with their overall strategy and objectives.
Finally, businesses should also consider the environmental impact of their warehousing operations. Sustainable practices such as energy-efficient lighting, waste reduction, and the use of renewable energy sources can not only reduce costs but also improve brand reputation and customer loyalty.
According to Allied Market Research, the global public warehousing market is anticipated to portray a considerable CAGR from 2021 to 2030.
Demand for refrigerated warehousing and storage has increased significantly, particularly in the pharmaceutical and food and beverage industries. The Care Quality Commission recommends that certain medications, such as insulin and antibiotic liquids, be stored at specific temperatures to maintain their efficacy. The use of eye drops and eyewash in the United States is also on the rise, with an expected increase in demand for liquid pharmaceutical products following the pandemic.
Effective supply chain management for temperature-sensitive products relies heavily on refrigerated storage during transportation and storage. Additionally, bilateral free trade agreements like NAFTA provide new opportunities for vendors in the United States to increase trade in perishable food products with minimal import duties, further fueling the market growth.
Due to the increasing need for cold storage warehouses, vendors in this market are consistently prioritizing expanding their reach. One such example is Lineage Logistics, which has been recognized by the International Association of Refrigerated Warehouses (IARW) as the leading provider of refrigerated warehousing and logistics services in North America, with a whopping 42,526.06 thousand cubic meters of temperature-controlled storage space.
Retail and e-commerce giants like Amazon and Walmart have a considerable impact on the demand for public warehousing solutions. Walmart currently operates 31 dedicated e-commerce fulfilment centres and uses 4,700 stores within a 10-mile radius of 90% of the US population to fulfil online orders.
However, a survey of US Amazon sellers revealed that the most significant challenges they face in upstream warehousing and distribution operations are complicated fee structures, high storage prices, and limited storage capacity. To overcome these issues, vendors are now focusing on developing new business strategies to attract more customers. For instance, Amazon recently introduced new services that allow sellers to utilize purpose-built facilities for bulk inventory storage and automated distribution, addressing these pain points.
To conclude, the public warehousing market is evolving rapidly, with new technologies and sustainability practices creating both challenges and opportunities for businesses. By prioritizing reliability, efficiency, and sustainability, and carefully evaluating the costs and benefits of automation, businesses can stay competitive in this dynamic market.
