Warehousing and Storage Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Warehousing and Storage Services Market is Segmented by Type (General Warehousing and Storage, Refrigerated Warehousing and Storage, and Farm Product Warehousing and Storage), Ownership (Private Warehouses, Public Warehouses, and Bonded Warehouses), End-user Industry (Manufacturing, Consumer Goods, Food and Beverage, Retail, and Healthcare), and Geography (North America, Europe, Asia-Pacific, Latin America, and Middle-East and Africa). The report offers the market sizes and forecasts in value for all the above segments.

Market Snapshot

Warehousing and Storage Services Market Analysis
Study Period: 2016 - 2026
Base Year: 2020
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 10 %
Warehousing and Storage Services Market Key Players

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Market Overview

The warehousing and storage services market is expected to register a CAGR of 10% during the forecast period, 2021- 2026. Warehousing and storage services provide storage for another company or organization's property, including parts, equipment, vehicles, products, and perishable goods.

The COVID -19 pandemic has forced shippers to rethink their supplier networks, stage inventory to balance against current demand fluctuations, and lean on internal or 3PL-provided freight visibility solutions. So far, the impact has generally higher volumes for 3PL companies and increased hours to manage at most warehouses. The pandemic impact has further resulted in many warehouses running busier than ever, mainly catering to food products, pharmaceuticals, and essential household goods. Amazon, Aldi, Asda, and Lidl have all reported a need to increase their capacities and hire an additional warehouse workforce. In April 2020, Amazon announced plans to hire 100,000 new warehouse workers to cover for sick employees and respond to the surge in orders from customers practicing social distancing.

The increasing demand for an omnichannel retailing model is expected to drive the market. In 2019, Pepperfry announced that it was investing USD 12 million (over INR 85 crore) in 2020 to set up over 100 offline stores and strengthen its supply chain operations to reach more customers. Though customers are embracing the online buying trend, they still prefer to 'touch and feel' in the pre-purchase process, especially before ordering big-ticket products such as furniture. Therefore, such preferences are expected to increase the customer base, resulting in expanding the warehouse and storage market.

Further, over the next couple of years, industrial warehousing is expected to grow in India's manufacturing units. As things stand, across eight Indian cities, NCR, Mumbai, Bengaluru, Pune, Kolkata, Chennai, Hyderabad, and Ahmedabad, the quality warehousing stock totaled 211 million sq. ft in 2019. The stock was expected to increase to 253 million sq. ft in 2020 and further to nearly 300 million sq. ft in 2021, according to JLL, a real estate services firm. According to a report by Make In India, the Indian logistics and SCM (supply chain management) sector was currently valued at USD 165 billion, with growth expected to reach USD 215 billion by the end of 2020. Furthermore, the industry has employed more than 22 million people and pushed the rank of India from 54 to 44 in the World Bank's Logistics Performance Index (LPI) 2018, in terms of overall logistics performance.

Further, the demand to slow inbound container flows is growing as some retailers and manufacturers fail to pick up containers because warehouses are full or closed. This is due to not being deemed essential service providers responding to COVID-19. To address such issues, container lines are offering shippers options to reduce demurrage fees by allowing them to store containers at their properties. In March 2020, Mediterranean Shipping Co. announced a "Suspension of Transit" (SOT) program at six transit hubs in Asia-Pacific, the Middle East, the Americas, and Europe. The service offering is targeted at beneficial cargo owners (BCOs) and cargo consolidators who need immediate container storage space.

Scope of the Report

Warehousing and storage services provide storage for companies or organization's property, including parts, equipment, products, and perishable goods. This often includes inventory management and distribution. Storage can be temporary or on a long-term contractual basis. Warehouse and storage accommodations may consist of environmental regulations, such as temperature and humidity control, to improve product lifespan or limit item degradation. Warehouse and storage services can make a client's property available for pick-up on short notice or distribute products on behalf of customers. The proper storage and tracking of inventory ensure that delivery times are met and asset management costs are reduced. The market is segmented by type (general warehousing and storage, refrigerated warehousing and storage, and farm product warehousing and storage), ownership (private warehouses, public warehouses, and bonded warehouses), end-user industry (manufacturing, consumer goods, food and beverage, retail, and healthcare), and geography (North America, Europe, Asia-Pacific, Latin America, and Middle-East and Africa). The report offers the market sizes and forecasts in value for all the above segments.

By Type
General Warehousing and Storage
Refrigerated Warehousing and Storage
Farm Product Warehousing and Storage
By Ownership
Private Warehouses
Public Warehouses
Bonded Warehouses
By End-user Industry
Manufacturing
Consumer Goods
Food and Beverage
Retail
Healthcare
Other End-user Industries
Geography
North America
Europe
Asia-Pacific
Latin America
Middle-East and Africa

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Key Market Trends

The Refrigerated Warehousing and Storage Segment is Expected to Grow Significantly

Refrigerated warehousing and storage is significantly showing positive trends toward market growth, mostly in the pharma sector. Moreover, the Care Quality Commission recommends that insulins, antibiotic liquids, injections, eye drops, and some creams must be stored between 2ºC and 8ºC to maintain the effectiveness of the medicines. According to the US Census Bureau, 112 .87 million Americans used eye drops and eyewash in 2019. This figure is projected to increase to 118 .49 million in 2023. Therefore, the increasing demand would have a positive impact on the refrigerated warehousing and storage market globally.

Further, seeing the demand for refrigerated warehousing and storage, companies are entering this segment to gain a competitive advantage and expand their geographic presence. For instance, in October 2019, United Parcel Service Inc. announced that it was expanding its capacity to handle its recent healthcare investment. The expansion would add 1. 3 million square feet of dedicated healthcare warehouse space and distribution network around the country, which was expected to reach 4 million square feet by 2020. Further, these warehouses would be equipped with climate controls, validated coolers, and freezers to protect high-value specialty pharmaceuticals.

In May 2020, Ahold Delhaize USA announced Americold as its partner to build the two previously announced fully automated frozen warehouses. The new facilities are part of the company’s previously announced supply chain transformation plan as it transitions to a fully-integrated, self-distribution model. The plan will expand cold-storage space by 24 million cubic feet or 500,000 square feet by building the two frozen facilities in partnership with Americold. The facilities will be located in Plainville, Conn., which will serve Ahold Delhaize USA’s Northeast brands, and in Mountville, Pa., which will serve Ahold Delhaize USA’s Mid-Atlantic brands.

Further, CBRE research explored the relationship between e-commerce grocery growth and cold storage warehouse capacity in its Food on Demand Series : Cold Storage Logistics Unpacked, suggesting that an additional 75 to 100 million square feet of industrial freezer/cooler space will be needed to meet the demand generated by online grocery sales in the next five years. The COVID -19 pandemic will likely accelerate this need for space, creating long-term impacts on the cold-storage sector. Considering that almost 95% of food imported to or produced in the United States goes through third-party distribution centers before reaching customers, this shift undoubtedly will positively impact the cold storage sector.

Warehousing and Storage Services Market Growth

North America is Expected to Hold a Major Share

According to the US Census Bureau, the warehouse and storage revenue is expected to increase by 2.1% p.a. from 2018 to 2023. In 2019, the revenue generated was USD 36.6 billion, compared to 2018, which was USD 35.6 billion. With significant growth in the manufacturing units, retail sector, and pharma units, the market shows potential growth in the United States. Further, it is estimated that transportation and warehousing will contribute to USD 22.24 billion of its GDP value (source IMF), where the significant contribution comes from the government sector, wholesale trade, manufacturing, etc. Further, players are continuously focused on expanding their facilities, which significantly drives the market growth.

There is a significant growth opportunity for third-party warehousing and distribution players, as only a small part of the sector in North America is outsourced, and e-commerce is growing. So, players are also expanding their facilities by engaging in expansions, mergers, and acquisitions. In February 2020, Maersk announced its plan to double its North American warehousing and distribution capacity with the purchase of the US firm Performance Team in a deal valued at USD 545 million (a figure that includes some USD 225 million) of warehouse lease liabilities. The company is primarily focused on strengthening its e-commerce fulfillment capabilities since many retailers are looking to increase online retail sales.

Further, Gebrüder Weiss has announced a new warehouse location in California’s premier logistics and distribution hub, the Inland Empire. The new 100,000 square foot facility, located at 11201 Iberia Street, in Jurupa Valley, is twice the size of Gebrüder Weiss’ existing warehouse in Torrance, California, which employs approximately 20 workers. Further, the company maintained its original growth strategy by expanding in the United States on the West Coast in Q2 of 2020 with its new Inland Empire warehouse and was eyeing additional expansion in the Midwest by the year end. The lucrative fulfillment industry has attracted a considerable number of new entrants, from lean start-ups to pop-up fulfillment services and relatively new 3PLs.

For instance, in March 2020, Amazon .com Inc. opened a series of small warehouses closer to big US cities in a move to save hours off delivery times. The company focuses on same-day delivery programs for retailers in Phoenix, Philadelphia, Dallas, and Orlando. The initiative underscores the company’s aim to stay quick in online retail, outdoing competitors’ free two-day delivery offers, so shoppers remain loyal to Amazon’s shipping and media-streaming club Prime, which costs USD 119 per year in the United States. The food and beverage industry’s demand in the United States is undergoing significant disruption from COVID-19, as US consumers increasingly have groceries delivered directly to their homes (D2C) or are buying online and picking up in-store (BOPIS).

Warehousing and Storage Services Market Statistics

Competitive Landscape

The warehousing and storage services market is very competitive, mainly because of local players' presence. The competition is expected to intensify in the future because of the relatively low entry barriers that encourage new entrants to enter further. Long-term partnerships, mergers and acquisitions, and high investments in warehouse management software are the prime growth strategies adopted by companies to sustain the intense competition. DHL Supply Chain, XPO Logistics Inc., and FedEx Supply Chain are a few of the key vendors.

Recent Developments

In January 2020, DHL announced its plan to expand its warehousing and supply chain businesses in India. DHL will soon make a significant investment to expand its Indian warehousing and supply chain capacity as the German logistics giant seeks to tap into the booming e-commerce business driven by Amazon and Walmart-owned Flipkart. DHL currently runs some 9 million sq. ft of warehousing and supply chain in India.

In December 2019, NFI boosted its presence in the southeastern United States by acquiring G&P Trucking Company Inc., a transportation firm based in Columbia, South Carolina. G&P's acquisition will add 370 tractors to NFI's fleet, bringing its total up to more than 3,000. NFI will now have more than 12,500 trailers, after adding 3,000 from G&P's fleet and adding to its work in specific verticals, including the automotive, retail, and textile industries.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview (Includes the Impact due to COVID-19)

    2. 4.2 Market Drivers

      1. 4.2.1 Rising Popularity of Omnichannel Distribution

      2. 4.2.2 Growth in the E-commerce Industry

    3. 4.3 Market Restraints

      1. 4.3.1 High Maintenance Costs

    4. 4.4 Industry Value Chain Analysis

    5. 4.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.5.1 Bargaining Power of Suppliers

      2. 4.5.2 Bargaining Power of Consumers

      3. 4.5.3 Threat of New Entrants

      4. 4.5.4 Threat of Substitute Products

      5. 4.5.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 General Warehousing and Storage

      2. 5.1.2 Refrigerated Warehousing and Storage

      3. 5.1.3 Farm Product Warehousing and Storage

    2. 5.2 By Ownership

      1. 5.2.1 Private Warehouses

      2. 5.2.2 Public Warehouses

      3. 5.2.3 Bonded Warehouses

    3. 5.3 By End-user Industry

      1. 5.3.1 Manufacturing

      2. 5.3.2 Consumer Goods

      3. 5.3.3 Food and Beverage

      4. 5.3.4 Retail

      5. 5.3.5 Healthcare

      6. 5.3.6 Other End-user Industries

    4. 5.4 Geography

      1. 5.4.1 North America

      2. 5.4.2 Europe

      3. 5.4.3 Asia-Pacific

      4. 5.4.4 Latin America

      5. 5.4.5 Middle-East and Africa

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 DHL International GmbH

      2. 6.1.2 XPO Logistics Inc.

      3. 6.1.3 Ryder System Inc.

      4. 6.1.4 NFI Industries Inc.

      5. 6.1.5 AmeriCold Logistics LLC

      6. 6.1.6 FedEx Corp

      7. 6.1.7 Lineage Logistics Holding LLC

      8. 6.1.8 NF Global Logistics Ltd

      9. 6.1.9 APM Terminals BV

      10. 6.1.10 DSV Panalpina AS

      11. 6.1.11 Kane Is Able Inc.

      12. 6.1.12 MSC - Mediterranean Shipping Agency AG

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. FUTURE OF THE MARKET

**Subject to Availability

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Frequently Asked Questions

The Global Warehousing and Storage Services Market market is studied from 2016 - 2026.

The Global Warehousing and Storage Services Market is growing at a CAGR of 10% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2020.

XPO Logistics, Inc., Ryder System, Inc., FedEx Corp, DHL International GmbH, NFI Industries, Inc. are the major companies operating in Global Warehousing and Storage Services Market.

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