The Rising Demand of Warehouse Space

Covid-19 has had many impacts on businesses and people and some of these impacts may become the new normal.  As stay at home orders were mandated and retail stores were forced to close, e-commerce saw exponential growth.  Although many companies over the years have implemented e-commerce into their operations, the shift from brick-and-mortar to e-commerce is expected to increase.  This shift to e-commerce will drive the demand of warehouse space.

An increase in investment in warehouse space is projected to occur as e-commerce retailers grow.  MasterCard stated that e-commerce spending grew 93% year over year this May.   According to a new report from Prologis, e-commerce requires three times the logistics space of traditional storefronts.  The reason for this is because 100% of the retailers' inventory is now in a warehouse, rather than spaced out between a warehouse and stores.  Also, online retailers tend to have a larger array of products in their inventory, thus increasing their storage needs. 

Due to the rising demand of warehouse space, DB Schenker, a global leader in supply chain management and logistics solutions is providing a new service.  This new service screens almost 9 million square meters of storage space daily.  It identifies and assesses available idle space in their almost 800 logistic warehouses in more than 60 countries.  Areas that are typically used for dedicated customers are being transformed into temporary storage areas for companies that urgently need additional capacity.  With Covid-19, industries such as food and healthcare are experiencing out of the ordinary demand rates, thus affecting their production levels and storage abilities.  Although this service was reactive to Covid-19, the ability and use of storage scanners will continue in the future, as the need for warehouses increase.

Warehouses have recently been and will continue to be in high demand.  The expansion of e-commerce and the shift from brick-and-mortar to e-commerce due to Covid-19 has drastically impacted the need for storage space.  The demand for warehouses will continue to rise.