Warehouse space is getting tighter. Lead times are shrinking. And the labor market is scarce. Warehousing and distribution leaders are constantly “doing more with less” to keep pace with new customer demands.
The rise of e-commerce is a major contributing factor to this ever-changing environment. Supply chains are becoming more complex as companies try to satisfy omnichannel buying trends. Warehouses and distribution centers (DCs) are contending with more stock keeping units (SKUs), same-day or next-day delivery and higher volumes of customer returns.
Many of these organizations are seeking more lastmile DCs – the last point of distribution before final delivery – to satisfy these customer demands. This trend often means moving away from sprawling logistics facilities to small or midsize buildings in denser urban areas.
Approximately 81% of U.S. warehouse development is dominated by industrial buildings of 50,000 to 500,000 square feet. Many organizations are building up instead of out to deal with the space restrictions. Demand for more warehouse space creates another challenge for organizations: the need for more workers. Approximately 452,000 new warehouse and distribution positions will need to be filled through 2019. This may be unsustainable in the already labor-strapped industry.