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A Warehouse Shortage Wakeup Call for Your Business

The global supply chain crisis continues to create headaches for businesses of all sizes, and warehouse woes paint an increasingly-troubling picture for business leaders. As goods become harder to move, warehouse resources are pushed beyond capacity, with a ripple effect that makes inventory management harder with every month that passes. 

US warehouse vacancy has reached a record low of 3.65% according to recent data from real estate investment firm CBRE. It’s a number that one CRBE executive equates to “effectively zero.” Meanwhile, Amazon has been binge buying warehouse space for quite some time, converting old malls into distribution centers, driving a boom in warehouse construction and driving up rents in the industrial real estate market. Businesses who previously had to worry about competing with Amazon’s Prime delivery offerings now have the added burden of living with Amazon’s impact on warehousing logistics.


Burning capital is an expensive strategy

As reported in the New York Times, companies with capital to spare are securing more space than they can use in an attempt to hedge against tomorrow’s ever-tightening logistics landscape. But even hearing about available space can be challenging, and many businesses can’t simply spend their way through a supply chain crunch that’s predicted to continue through at least 2023.

Where does that leave small and midsize businesses whose hopes for growth may be tripped up by warehouse shortages? Ideally having frank, proactive conversations with their logistics partners.


A misguided sense of security can hold your business back

Businesses holding onto legacy logistics systems are particularly vulnerable to shockwaves rippling through the supply chain landscape. The comfort level offered by managing warehousing and other logistics functions in-house is increasingly outweighed by the reality that the logistics landscape is evolving at a pace that’s hard for many businesses to match without third-party support. 

One big reason businesses hold on to legacy logistics systems is concern over security. However, modern logistics offerings are designed to provide maximum visibility into the supply chain, greater levels of automation and granular-level reporting. Not forgetting a focus on state-of-the-art warehouse security features to ensure that on a physical level, your goods are held securely.  


In a warehousing shortage, agile solutions are key

In the past, warehousing decisions that would be dictated by need now come down to scant availability. For example, it might make sense to warehouse near a loading dock, but that may no longer be an option today. Similarly, the right warehousing space may help manage seasonal demand. But it’s a buyer’s market out there, where the businesses with the deepest pockets make for tough competition. 

While there are no easy answers to the current warehousing shortage, the more agile a business can be around supply chain issues, the better. If your core business competency isn’t warehousing, a specialist logistics partner can deliver solutions that leverage deep category expertise, and give your business the agility required to survive and thrive through this challenging period.

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