jsreric roll forming machine

ousing
Warehousing Trends

There is another trend taking place in this industry. 3PLs, otherwise known as Third Party Logistics, outsource elements of a retailer’s distribution, warehousing, and fulfillment services. Demand for 3PLs almost doubled in 2019 for e-commerce. Keep in mind that this tremendous increase in demand took place before the COVID-19 pandemic. When the report comes out for 2020, it’s likely to be the most significant demand gain for 3PLs in history.

Savvy retailers now want more co-warehousing, so they can cut costs while still capitalizing on location, technology, and labor. Going forward, we are very likely to see higher demand for industrial space, but not in the traditional sense. Retailers don’t want massive warehouses and long-term contracts anymore. They want smaller spaces and shorter-term leases because the economy is more unpredictable than in the past. Retailers also don’t know what products will be in demand. Due to current global conditions, this can change from one day to the next. Retailers want flexibility.

On-Demand Warehousing Post-Lockdown
Two men going around a warehouse steel building

Regardless of how things play out with the economy and demand, retailers want their smaller warehouses to be commercial grade. It’s more of a focus on quality than space now.

As far as the economy goes and where things are likely to go, we can use logic to make our best prediction. Many people lost their jobs due to the Covid-19 pandemic, which led to decreased consumer demand for products and services. The health crisis, in turn, led to many companies needing to lay off more of their employees to cut costs so they could stay afloat. Some businesses had to close up shop. For a minute, it seemed as though Covid-19 concerns were fading, but then the riots began and renewed doubts for the economy to bounce back. Overall, it will likely take a long time for the economy to recover, but there will be bursts of hope because we will be starting from such a low point.

The anti-racism and discrimination riots also play a role in this. They add to the fact that more people will prefer to shop online than in the past. For the omni-channel retailers, as well as online retailers, this is good news. It’s terrible news for retailers that bet on brick and mortar coming back to full strength.

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