Shippers turn to alternative storage options as they seek to manage inventory headaches.
Companies and warehouse providers are scrambling for creative solutions to overcome a lack of warehouse space as they revamp supply chain networks to embrace e-commerce expectations.
The amount of available U.S. warehousing and logistics space sits at a multiyear low, according to real estate researcher CBRE Group. In the fourth quarter of 2018, availability for industrial real estate fell to its lowest level since 2000, the 34th consecutive quarter of decline.
Equipment providers and startups are stepping in to supplement the traditional warehouse market, from temporary trailers to Airbnb-style matchmakers that bring warehouse space and inventory together.
Mobile storage fills the gaps
Companies like Milestone Equipment Holdings lease dry van trailers as temporary storage space. It’s been an ad hoc practice in the past as a warehouse manager scrambled to accommodate inventory spikes.
The temporary trailers — which may be used for years — allow companies to scale their warehouse space based on demand. Some companies moved imports up to beat rising tariffs or geared up for holidays or promotions.
“Some inventory needs to be mobile so they’re keeping it on the trailers, but then they’re moving the trailers where they need them,” Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence, told Supply Chain Dive.
Now temporary or on-demand space is becoming a long-term factor in warehouse strategies for e-commerce, as companies revamp their supply chains to support fulfillment and fast delivery
“For our traditional customer base, it’s difficult to access warehouse space, to find enough of it in small quantities across the country to meet the compressed delivery time expectations that’s now transitioning into the B2B world as well,” Sarah Johnson, executive vice president of mobile warehousing and storage for Milestone, told Supply Chain Dive.
Milestone has a fleet of nearly 60,000 trailers and can dispatch a storage trailer within 48 hours from one of its 25 U.S. branch locations. Trailers available for storage include 53-foot and 48-foot dry vans with roll-up or swing doors. Johnson said the cost of storage in trailers could be up to 50% less than brick-and-mortar warehouse space.
Companies are also tapping trailers for reverse logistics. One national retailer has used about 1,000 of Milestone’s trailers to store returned goods.
“We’re helping them think about our trailers more in terms of real estate as opposed to a trailer,” Johnson said “Temporary storage represents a good opportunity for companies to try different solutions before they commit their capital or find a substantial term lease for warehouse space, which is tough to come by now.”
In response to the demands of e-commerce, retailers are reconfiguring distribution to be closer to consumers for faster delivery time. The mobile warehouses help shippers transition from large distribution centers in low-cost outlying areas to smaller sites in more expensive urban areas.
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SOURCE: Supply Chain Dive