Warehousing and Storage Services Market - Growth, Trends, and Forecasts
The warehousing and storage services market is expected to register a CAGR of 10% during the forecast period from 2020 to 2025. Warehousing and storage services provide storage for another company or organization’s property, including parts, equipment, vehicles, products, and perishable goods.
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This often includes inventory management and distribution. Storage can be temporary or on a long -term contractual basis. Warehouse and storage accommodations may consist of environmental regulation, such as temperature and humidity control, to improve product lifespan or limit item degradation. Warehouse and storage services can make a client’s property available for pick-up on short notice or distribute products on behalf of their customer.
– With the increasing demand for an omnichannel retailing model, it is expected to drive the market. Earlier in 2019, Pepperfry announced that it is investing USD 12 million (over Rs 85 crore) in 2020 to sets up over 100 offline stores and strengthens its supply chain operations to reach more customers. Though the online buying trend is embracing, customers still prefer to ’touch and feel’ in the pre-purchase process, especially before ordering big-ticket products such as furniture. Therefore such preferences are expected to increase the customer base, resulting in expanding the warehouse and storing market.
– Further, over the next couple of years, industrial warehousing is expected to grow in India’s manufacturing units. As things stand, across eight Indian cities, NCR, Mumbai, Bengaluru, Pune, Kolkata, Chennai, Hyderabad, and Ahmedabad, the quality warehousing stock totaled 211 million sq. Ft in 2019. The stock is expected to upto 253 million sq. ft this year and further to nearly 300 million sq. Ft in 2021, according to JLL, a real estate services firm. According to a report by Make In India, the Indian logistics and SCM (Supply Chain Management) sector are currently valued at USD 165 billion, with growth expected to reach USD 215 billion by the end of 2020. Furthermore, the industry has employed more than 22 million people and pushed the rank of India from 54 to 44 in the World Bank’s Logistics Performance Index (LPI) 2018, in terms of overall logistics performance.
– Further, the COVID -19 pandemic has forced shippers to rethink their supplier networks, stage inventory to balance against current demand fluctuations, and lean on internal or 3PL -provided freight visibility solutions. So far, the impact has generally higher volumes for 3PL companies and increased hours to manage at most warehouses. The pandemic impact has further resulted in many warehouses running busier than ever, mainly catering to food products, pharmaceuticals, and essential household goods. Amazon, Aldi, Asda, and Lidl have all reported a need to increase their capacities and hiring additional warehouse workforce. In April 2020, Amazon announced plans to hire 100,000 new warehouse workers to cover for sick employees and respond to the surge in orders from customers practicing social distancing.
– Further, the demand to slow inbound container flows is growing as some retailers and manufacturers fail to pick up containers because warehouses are full or closed. This is due to not being deemed essential service providers responding to COVID -19. To address such issues, container lines are offering shippers options to reduce demurrage fees by allowing them to store containers at their properties. In March 2020, Mediterranean Shipping Co . announced a “Suspension of Transit” (SOT) program at six transit hubs in the Asia Pacific, the Middle East, Americas, and Europe. The service offering is targeted at beneficial cargo owners (BCOs) and cargo consolidators who need immediate container storage space.