Warehousing and Storage Services Market Size

Warehousing and Storage Market Analysis

The Warehousing And Storage Services Market size is expected to grow from USD 691.74 billion in 2023 to USD 963.74 billion by 2028, at a CAGR of 6.86% during the forecast period (2023-2028).

The growth of the industrial sector, increasing demand for manufactured products, processed and frozen food products, and the expansion of the e-commerce industry are among the significant factors driving the demand for warehousing and storage services.

• Warehousing and storage services provide storage for another company or organization's property, including parts, equipment, vehicles, products, and perishable goods. The increasing demand for an omnichannel model is expected to drive the market. Although customers embrace the online buying trend, offline stores still hold a significant market share, especially in the big-ticket products segment, such as furniture, which expands the warehouse and storage market.
• With supply chains being reconfigured to meet demand faster than ever, warehouses are increasingly integrating logistics, as logistics services play a crucial role in this process. Additionally, with the globalization trend further expanding its scope, a significant portion of the inventory of industries that operate globally is delivered frequently from abroad to a warehouse to transfer finished goods through the supply chain, which in turn is also driving the demand for warehouse and storage services.
• The growth in demand and requirement to store new product types have significantly impacted the complexity of the warehouse service providers, who now have started to look for innovative technologies that can help them reduce the complexity and provide them with tools to manage the facility better. For instance, Warehouse Management System is one such solution that offers visibility into a business' entire inventory and works supply chain fulfillment operations from the distribution center to the store shelf.
• Furthermore, warehousing/storage service providers are also focusing on optimizing their batching, handling, and picking processes to enhance delivery times further while ensuring the quality of delivery. Such trends facilitate the development of new warehouse construction and management techniques. Additionally, to compete with global players, many vendors are adopting emerging technologies, such as GPS, RFID, VoIP devices, digital voice, and imaging technology for warehouse operations.
• However, the higher investment required to set up warehouses and adopt advanced technologies is among the significant challenges warehouse/storage service providers face. Furthermore, a lack of awareness among SMEs and common global standards also challenges the market's growth.
• COVID-19 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. Although in some sectors, especially in the industrial and manufacturing domain, the demand declined, especially during the initial phase, the market is expected to recover gradually in the coming years.