Warehousing and Storage Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,700 warehousing and storage services providers in the US act as middlemen in the transport of general merchandise, refrigerated goods, and other types of products. Major revenue categories include storage services, specialty services, handling of goods, logistics, and transportation. Specialty services include breaking bulk, returns handling, and light assembly. Contract warehouses generally require a legal agreement for services over a fixed period (typically three years). Public warehouses generally provide short-term storage, often on a month-to-month basis.
Move To Minimize Inventory Levels
Many customer industries have made significant investments in technology and infrastructure to free up working capital by minimizing inventory holdings, reducing the need for third party storage.
Value-Added Warehousing
As customers continue to demand more from the warehousing and storage industry, the popularity of value-added warehousing grows.
Industry size & Structure
The average warehousing and storage services provider employs about 217 workers and generates $6.6 million in annual revenue.
- The warehousing and storage services industry consists of about 8,300 firms that employ over 1.8 million workers and generate about $55 billion annually.
- The industry is somewhat fragmented. The top 50 companies account for about 45% of industry revenue.
- Large companies include Excel Holdings (Deutsche Post AG), FedEx Supply Chain (formerly GENCO Distribution Systems), and Iron Mountain Incorporated. The line between warehousing and storage services and logistics is blurred, with companies in both sectors offering similar services.
- Major customer industries include retail and consumer products, high-tech/computers, food and beverage, automotive, and industrial.
Industry Forecast
Warehousing and Storage Services Industry Growth
Recent Developments
Nov 7, 2024 - Industry Has High Injury Rate
- Musculoskeletal disorders are the leading cause of injuries among warehousing and “last-mile delivery” workers, according to the US Government Accountability Office. The transportation and warehousing industry had the highest serious injury and illness rate (3.8 cases per 100 workers) among the 19 sectors analyzed in 2022. The top cause of ailments among workers in the industry was “overexertion and bodily reaction,” which can lead to issues such as back pain. Contact with objects or equipment and slips, trips, and falls were the other two major causes of injuries.
- Proposed legislation in California would establish siting and design standards for industrial warehouse development. New warehouse developments would need to be located on major thoroughfares or local roads that mainly serve commercial uses. Warehouse sites would need to be set back several hundred feet from so-called “sensitive sites” such as homes, schools, and healthcare facilities. If a developer demolishes housing to make way for a warehouse, the bill would require two new units of affordable housing for each unit that is destroyed. The developer would have to provide displaced tenants with 12 months’ rent. Proponents say that the measure would better protect the health of people living nearby.
- Demand for sustainable warehouse development is increasing, according to real estate investment trust Prologis. Installed warehouse rooftop solar capacity will double in 2023, and EV truck charging capacity will exceed 10 megawatts, the firm said. Building future-proof facilities can shield logistics companies from future operational risks including changing regulations, community resistance, and volatile fossil fuel-based energy pricing. Costs for sustainable building and operations are dropping. Expenses associated with sustainability have been a huge roadblock for businesses wanting to gear toward green, but government incentive programs and the European energy crisis have the power to turbocharge these longer-term trends, according to Prologis.
- Warehousing and storage service industry revenue increased 1.4% year over year but decreased 0.1% quarter over quarter during the second quarter of 2024, according to the US Census Bureau. Warehousing and storage industry employment and average wages for nonsupervisory employees increased slightly during the first nine months of 2024, according to the BLS. Warehousing and storage service prices increased moderately during the first nine months of 2024, according to the US Bureau of Labor Statistics (BLS). Prices have been significantly above the long-term historical trend since 2021.
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