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Warehouse space boom highest since 2000

Here’s good news for warehouse operators: With ecommerce expected to increase nearly 60 percent over the next five years — from $335 billion in U.S. online sales to $523 billion — warehouses are needed more than ever.

In fact, almost half of the 167 million-square-feet of warehouse space currently under construction in the U.S. is already committed to tenants. A new report from the CBRE Group says that ecommerce, third party logistics, and retail users represent the majority of tenants scooping up available space that hasn’t yet been built. History is being made as the current number of pre-committed warehouse space is the highest since 2000.

What markets are the healthiest? Denver (70 percent of space pre-committed), Kansas City (54 percent), Chicago (51 percent), Indianapolis (51 percent), and New Jersey (43 percent).

Obviously, the demand for more space means increased pressure for operators to move good faster and more efficiently. Zebra Technologies, a global transportation consultancy, recently published a report surveying more than 1,300 warehouse professionals from around the world and revealed that, to keep up with demand:

  • 75 percent of them plan to adopt more modern, full-featured warehouse management systems (WMS) by the year 2020.
  • 73 percent plan to incorporate barcode scanning and/or enhanced computing technologies.
  • 76 percent will invest more in real-time location systems to track inventory throughout the warehouse.

The report confirms that in only three years, warehouse operators with upgraded WMS systems will be in the majority compared to those sticking with traditional systems. The reasons for making the switch are what we expect, according to Zebra: reducing transportation costs (43 percent), increasing delivery times (34 percent), and taking advantage of new supplier and partner locations (32 percent).

Companies are discovering that advanced technologies like mobile tech is helping them fulfill all of those goals. Hands-free picking, transparency, RFID tag scanning, and easy touchscreen input are designed to improve productivity and reduce errors.

Retailers are engaged for the fight of their lives right now. Brick-and-mortar operations are shrinking yet in the online space, behemoths like Amazon are dominating. In working to merge the physical and online operations, efficiency matters, but so does public trust. So by delivering what clients need and where and when they need it is the winning formula. As the Zebra study shows, more retailers are coming around to understanding how advanced technologies in their warehouse operations will get them to the front of the line.

 

What are your reasons for switching to a WMS system? How has advanced tech helped strengthen your bottom line or increased business? Let us know in the form to the right!