Analyst study: ecommerce boom will see 28,500 new warehouses brought into service by 2025

A new research project from analyst firm Interact Analysis, titled the “Warehouse Building Stock Database,” points to rapid growth in the number of warehouses needed globally, driven by the rapid expansion of ecommerce. Interact Analysis estimates the global stock of warehouses reached 150,00 at the end of 2020, representing 25 billion square feet. It also predicts that due to the ecommerce boom, 28,500 new warehouses will be brought into service by 2025

The COVID-19 pandemic has been a game-changer for ecommerce across the globe. while demand is likely to flatten out as the virus is brought under control, the signs are that the ecommerce habit will have been embedded for the long term, thus the need for more warehouses and fulfilment centers. Interact Analysis notes that ecommerce in the US accounted for 4.5% of total retail sales in 2011, but this rose to 10% in late 2019, then rocketed to 15% in less than a year during the pandemic. Big players have made spectacular gains, with Amazon in February 2021 reporting its highest ever quarterly sales, surpassing $100 billion. Meanwhile Walmart’s online business was up 79% in the quarter to October 31st 2020, and Target saw its eCommerce sales boom by 154% in the same period.

“While many industrial and service sectors continue to reel from the effects of the COVID-19 pandemic, warehousing and fulfilment centers are a real growth area, with staffing set to increase by 50% by 2025,” commented Jason dePreaux, principal analyst at Interact Analysis. “There has been a surge in automation projects caused by labor shortages in some markets. Yet 60% of all warehouses are in regions where the cost of labor is under $10 an hour and automation has yet to gain a firm foothold. As developing economies advance, which they inevitably will, we can expect to see major growth in automation in these regions too.”

North America and Europe have a disproportionally high quantity of warehouses relative to their population. However, the burgeoning middle class and demand for retail goods in developing countries will mean that by 2025 China, the USA, Japan, India, and Germany will account for more than 50% of the global warehouse building stock of 180,000 units.

The research also finds that globally, it is estimated the warehouse sector employed the equivalent of 8.5 million full-time employees in 2020, and is forecast to grow to nearly 13 million workers by 2025. Interact also noted that the third party logistics (3PL) and general merchandise accounts for about 60% of warehouse demand, and that these sectors will be responsible for roughly 4.5 billion square feet of additional space over the next five years.