Blog Posts Ecommerce Fulfillment Trends: Warehouse Space Constraints
- In a 2022 survey, 29% of ecommerce fulfillment professionals say they face warehouse space constraints.
- Demand for industrial warehouse space is likely to continue through next year.
- Warehousing optimization can help to increase efficiency and optimize capacity.
What’s next for order fulfillment operations? The 2022 Ecommerce Fulfillment Trends Report draws on the experiences of nearly 300 ecommerce fulfillment professionals to help benchmark the state of the industry and where it is headed. Digital Commerce 360 recently discussed the findings with Perry Belcastro, Saddle Creek’s senior vice president of fulfillment.
Following are excerpts…
What are the biggest fulfillment challenges retailers and brands face today?
The past couple of years have been incredibly challenging for fulfillment operations. Our industry survey shows that delivery expectations, transportation capacity, labor shortage, warehouse space, and technology limitations are the top five issues. These factors will likely remain in play well into 2023.
More companies are expanding their distribution networks to move inventory closer to customers to minimize transit time and cost and mitigate supply chain disruptions.”
~ Perry Belcastro, Senior Vice President of Fulfillment, Saddle Creek Logistics Services
What issues are companies experiencing regarding warehouse space?
Warehouse space constraints posed challenges for 29% of respondents. Vacancy rates for industrial warehouse space have reached record lows as record ecommerce growth drives up demand and cost. More companies are expanding their distribution networks to move inventory closer to customers to minimize transit time and cost and mitigate supply chain disruptions.
Increased demand for space is likely to continue through 2023, so maximizing warehouse space is more important than ever. Higher ceiling heights, narrow aisles and efficient racking systems can help increase efficiency and optimize capacity.
In such a tight market, many companies opt to work with a third-party logistics provider with a multiclient environment, so they have access to scalable space well suited for ecommerce fulfillment without a permanent overhead investment.
For more of the conversation, read the full Q&A.
Related to: DC Network Configuration, Managing Growth, Selling Online