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
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jul 6, 2024 - Prices Increase
                                  • Warehousing and storage service prices increased moderately during the first quarter of 2024, according to the US Bureau of Labor Statistics (BLS). Prices have been significantly above the long-term historical trend since 2021. Warehousing and storage industry employment decreased slightly during the first quarter of 2024 while average wages for nonsupervisory employees increased slightly, according to the BLS.
                                  • Containerized imports to the US increased substantially during January, February, and March from the corresponding months of the previous year, up 10%, 21%, and 23%, respectively, according to The Waterways Council. The first quarter is typically the slowest period for containerized imports. Importers anticipating additional disruptions in the Red Sea and potential disruptions due to global political instability are focusing on replenishing retail inventories and preparing peak season stocks, according to The Waterways Council. Marine support services may benefit from the import surge.
                                  • Global goods trade is expected to increase gradually in 2024 following a contraction in 2023 that was driven by the lingering effects of high energy prices and inflation, according to the World Trade Organization. The volume of world merchandise trade, a driver of demand for warehousing and storage, is expected to increase 2.6% in 2024 and 3.3% in 2025 after falling 1.2% in 2023. Regional conflicts, geopolitical tensions, and economic policy uncertainty pose substantial downside risks to the forecast, however.
                                  • 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.
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