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 8,300 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 234 workers and generates $6 million in annual revenue.
- The warehousing and storage services industry consists of about 8,300 firms that employ over 1.9 million workers and generate about $49 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
Mar 19, 2024 - Prices Rebound
- Warehousing and storage service prices have rebounded moderately from a 2023 low recorded in June, according to the US Bureau of Labor Statistics (BLS). Prices have been significantly above the long-term historical trend since 2021. Industry employment began rebounding in September 2023 after a steady decline during the prior eight months but remained below January 2023 levels, while average wages for nonsupervisory employees increased moderately during 2023, according to the BLS.
- US freight cycle fundamentals will improve in 2024, according to the latest release of ACT Research’s “Freight Forecast, U.S. Rate and Volume Outlook report.” Warehousing and storage firms are likely to benefit from an increase in freight traffic. The upswing will come as post-pandemic effects fade, income and retail sales rise, and ocean shipping disruptions accelerate the end of an 18-month destocking process. A main driver of the shift is the disrupted global ocean shipping sector, according to Tim Denoyer, ACT Research’s vice president and senior analyst. The two primary routes from Asia to the US East Coast have been severely impacted by conflict in the Red Sea and low water in the Panama Canal. This is pressing freight to the west coast ports, where the intermodal network will likely experience strong demand, which will eventually flow into the truckload market.
- The average warehouse vacancy rate increased to 5.2% in the fourth quarter of 2023 from 4.6% the previous quarter and 3.1% a year earlier, according to commercial real-estate services firm Cushman & Wakefield. More US warehouse space is unused than at any time since the coronavirus pandemic. Companies signed new leases for about 588 million square feet of warehouse space for the full year in 2023, down 27% year over year, according to Cushman & Wakefield.
- 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.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.