Will Global Warehousing Costs Increase?

Group of Workers in WarehouseThe global pandemic has had quite the impact on all sorts of things, including warehousing and warehousing costs. Both shippers and consignees can expect global warehousing costs to increase. Why? Well, there’s high demand and low supply. Combine that with rising construction costs, and you can expect warehousing rents to increase by 10% or more this year!

Costs are rising not just in the U.S. or Europe, but all over the world. Meanwhile, warehouse capacity is limited. Global warehouse building stock just can’t keep up with demand. There should be about 180,000 warehousing units, globally, by 2025, with more than half located in China, India, the U.S., Japan and Germany. Will that be enough? Probably not. 

The Impact of e-Commerce

The rise of e-commerce is causing the need for more warehousing… less people are shopping in traditional retail stores while more people are shopping online. Therefore, fulfillment centers/warehouses are in demand. Yet there aren’t enough of these buildings and operations available to fulfill the current needs of the world. 

The coronavirus pandemic encouraged countless people to shop online rather than shop at retail stores. Now that they’re “used to it,” expect e-commerce to perhaps overtake retail as the chief way people get the goods they want and need. 

Current warehouse space is under construction, and much of it has already been pre-leased. In many markets, vacancy rates are extremely low. 

Could automation help offset the shortage of space? Perhaps, but it’s not a panacea.

Overall, expect warehousing costs to increase this year. 

If you’re looking for warehouse space, Affiliated Warehouse Companies is in the business of finding you high quality warehousing services across North America. Public warehousing, contract warehousing, freezer/cooler warehousing, and logistics are all things Affiliated Warehouse Companies can help you with– please call 732-739-2323 for more information.