Making it as a 3PL in today’s world is not an easy job. It requires a lot of effort, commitment, and knowledge about the industry. This is why it is important to be aware of all the things going on in the fulfilment world – whether they are big or small.
One such thing is the ongoing warehouse space shortage. Any business that is looking to make their break in the logistics world should be aware that there is a warehouse space shortage going on all over the world right now, which means that any space that you do get will be expensive. For 3PLs, this a double-edged sword – the rise in costs of storage motivates businesses to entrust them with the logistics of their operations but it also means that 3PLs have to be smart about the warehouse space they have and utilise it properly. In short, in order to succeed, your warehouse should be optimised from top to bottom so that you don’t fall victim to the shortage!
For more information, refer to the statistics below because they will give you a better idea about how the warehouse space shortage could play into the overall trajectory of 3PL businesses, including yours.
Warehouse statistics to warm you up for the real deal.
The warehouse space globally is going through a crisis of sorts. Here’s everything you need to know about it.
For businesses that don’t want the headache of looking for warehouse space amidst a global shortage, third party logistics providers i.e. 3PLs are the best option:
Another thing that can help you get rid of the warehouse blues is warehouse automation. These statistics prove that warehouse automation is certainly something you should consider:
72% of businesses believe that a warehouse management system is the popular warehouse management software as of 2020 (G2). This shows that warehouse management systems are an integral part of the logistics journey for many businesses. If you consider the level of optimisation they provide to businesses, it makes sense that they are such an important part of so many strategies. With the help of an efficient warehouse management system, you can optimise your storage space in the best possible way.
The global warehouse automation market will surpass USD 30 billion by 2026 (G2). As more businesses develop in this direction, it can be assumed that existing warehouse space will be adequately optimised and we may even be able to see a decrease in the warehouse shortage based on this.
77% of organisations claim they are serious about utilising automated warehouse systems to maximise data-driven performance and boost efficiency within these fulfilment centres (G2). If things keep going this way, most businesses will be able to counter the problem of warehouse shortage and not suffer from the various issues that may come with it.
In case you are wondering what the future for warehouse space shortage seems to be for 2023, here are a few stats that will help you get a better idea.
Supply chain disruptions due to warehouse shortage are expected to persist even in 2023 (Meteor Space). Warehouse shortage has an impact on the seamlessness of your supply chain. If you are experiencing warehouse space shortage, you are most likely to also experience problems with your supply chain. Unfortunately, even in 2023, supply chain disruptions caused due to the lack of warehouse space are likely to persist. This means that if you want these problems to not impact you in a negative manner, then you should get to figuring out solutions straight away!
2023 is likely to experience rising costs, low vacancy rates and insufficient new industrial space. (Kardex) While warehouse space shortage is predicted to persist all throughout 2023, there are other problems that you will have to consistently deal with as well. Altogether, this does not paint a great picture and shows that the stakes for warehouse managers are likely to increase this year, as they have to deal with multiple problems simultaneously. Again, getting ahead of the problem and making some changes that will actually help you counter this issue effectively is the only way to go about this, and we recommend that you do that as soon as possible!
The labour market that was suppressed in 2020 as a result of the pandemic is going to continue being suppressed. (Conveyco) The warehouse space shortage problem, when paired with the labour shortage problem, is likely to cause great distress to warehouse managers. The worst part is that even in 2023, neither of these problems will go away and businesses will have to come up with ways they can work around these persistent issues without them taking a toll on their operational efficiency. From where we see it, it will definitely turn out to be a struggle – which is why businesses need to do their best from the start of the year so that the rest of the year can actually turn out to be contributive towards their overall success.
According to experts, demand for warehouse space will shrink in 2023. (Multichannel Merchant) However, not all is glum when it comes to the stats on warehouse space shortage! According to Multichannel Merchant, warehouse space demand will shrink in 2023. A reduction in demand means that there may be a chance for the situation to get a little better. So, although all other statistics point towards the warehouse space challenge getting even more cut-throat this year, this one statistic serves as a glimmer of hope and may mean that the situation may improve as anticipated in 2023!
Warehouse space shortage is a serious problem that cannot be fixed until it is tackled from the root. Essentially, there needs to be some policy changes in industrial and warehouse real estate, so that warehouse space cannot be hoarded and that all businesses get the chance to comfortably sort out their fulfilment and storage needs.
However, until the problem is fixed, businesses can work their way around it. One way is to hire 3PLs and get logistics services. This way, it is easier to save money and also to ensure that their logistics are being sorted out by the best of the best – people who actually experience in smoothing out the fulfilment procedure.
Another thing that can help businesses is warehouse optimisation with the help of a warehouse management system. Warehouse management systems like Canary7 are designed by 3PL professionals and have the primary goal of streamlining fulfilment activity in a way that saves space, cuts down costs, streamlines order management; all while not compromising on the speed and efficiency of your operations.
If you take these two hand in hand, you can avoid having to experience the warehouse shortage at least upfront, and can instead have a wonderful, error-free warehousing experience.
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