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Warehousing in the E-commerce Era

The needs of e-commerce are changing the warehousing landscape worldwide, but these changes are especially apparent in the United States.  Many companies are looking to invest in voice-directed picking as the demand for speed and accuracy increases.  Workers are no longer expected to pick large boxes, but rather individual items. This higher level of detail requires I different set up in facilities. Consumers have driven this e-commerce shift, and now the expectation for better, faster service is growing. The rapid growth of online sales and the competitive pressure to deliver goods faster has companies investing in smaller facilities near population centers as opposed to focusing on traditional logistics hubs.  However, rising warehouse rental costs could cause problems.

As strategically located warehouses become more important in order to keep up with the demand generated by strong e-commerce sales, rental prices are risings.  Globally, there has been a 2.8% increase in industrial leasing rates as measured by the real-estate brokerage firm CBRE Inc.  In the U.S. that number is much higher, with a 9.9% increase in rates in 2015 for prime warehouse space. This large jump can be attributed to the premium being placed on proximity to the consumer.  In the U.S. online sales are soaring, while sales at brick-and-mortar stores are falling. 48% of respondents said that they plan to increase their number of warehouses in the coming year, according to a report by Zebra Technologies Co.  As online sales continue to grow and competition for prime warehouse space rises, companies will have to look to maximize every cubic foot of their facilities in order to provide their customers with the best prices and competitive delivery times.

 

Sources: The Wall Street Journal, Zebra Technologies, Advertising Specialty Institute

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