US Warehousing Market 2020-2025

October 22, 2020
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Warehouses act as a strategic decoupling point in the supply chain, they enable companies to match customer demand and Supply when they are not in synchronization. With supply disruption of consumer goods, medicines and food products due to coronavirus pandemic warehouses came under a lot of pressure for order fulfillment. Not only pandemic

  1. As United States shifting its focus from globalization, this would bring onshoring and near shoring in the front seat, these would increase the demand for warehousing.
  2. Health care industry’s cold storage would experience a huge demand as many nations have fast paced clinical trials of COVID-19 vaccine.
  3. E-commerce and online grocery are expected to generate more demand for large warehouses as pandemic has changed the shopping habits of customers and this is likely to stay post pandemic.
  4. With the increase in the market share of e-commerce players, many retailers are repurposing themselves are distribution centers, which ever-growing pressure on delivery lead time and costs associated these new distribution centers would see a spike in demand as this helps e-commerce players achieve hyperlocal fulfillment.
  5. As the pressure on sustainability is going up the demand generated due to reverse logistics is expected to go up.
  6. As there would be changes in import export imbalance in United States, this would reduce the demand for bonded warehouses.
  7. Industries like Chemicals and specialty material are hit very hard in the US, the likely demand for the specialized warehouses handling them would reduce in the short term.
  8. As many large companies are now moving towards outsourcing warehousing activity, this would surge the demand for 3PL warehouses.
  9. Improved On-cloud warehouse management systems would help reduce the capital expenditure and operating expenditure, this would help fasten up setting up of warehouses.
  10. Automation in the areas of put away and order picking, with the help of short-range communication devices and 5G would reduce the warehouse cycle times even further



The warehousing market can be segmented into the following categories

  1. Ownership

    1. Contract Warehouse/ Distribution center
    2. Third party Warehouse/ Distribution center
    3. Company owned and company operated Warehouse/ Distribution center
    4. Bonded Warehouse
  2. Storage Type

    1. General Purpose
    2. Agri-Warehouse
    3. Cold storage warehouse
  3. By Relative Size

    1. Large warehouses
    2. Distribution centers
    3. Cross docking facilities



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Proliferation Of 3PLs

With ongoing pressure to improve agility of the supply chains company owned and company operated came under a lot of pressure in the United States so many companies are looking out for outsourcing the warehousing activity, this would be a beneficial move from 3PLs perspective as this would potentially raise the demand for them.


Rift In US-China Relationship

The strained relations between the two largest economies the US and China and the likelihood of this relationship irrespective of the who is elected into the office of the US, would be a strain on Imports into US this would be strain on Bonded warehouses, the underutilization of these is likely to increase post pandemic.


Rise Of E-Commerce

As many 3PL companies like DHL and UPS which are already into the B2B e-commerce segment serving various small businesses now have a huge potential to serve the B2C sector as this segment has seen a huge spike demand during pandemic, many of these companies are looking for rapid expansion which would positively impact the US warehousing market.

E-commerce companies would generate larger share of demand for cold storages and Agri warehouses as the share of commerce through online mode has increased multifold during pandemic, with storages in food products of all the categories fresh, chilled and frozen categories.

With hyperlocal fulfillment strategies e-commerce players would generate more demand for smaller distribution centers (repurposing the retails in the city) than for larger ones which generally are located at the suburbs of the city.

This trend can be observed in the commercial construction sector only warehouse construction showed an increase amid the pandemic while retail, hotel and housing have shown a large drop.

CNBC expects that the United States needs another billion square feet of space in the next five years to cater the demand generated from e-commerce industry.



Deloitte predicts that sectors like Apparel and footwear, Hotels & restaurants, chemicals and automotive have taken the biggest hit due to COVID-19 this would be reflected in their respective warehousing markets, whereas Pharmaceuticals and consumer goods have been shielded and the impact has been minimal so logistics partners and warehousing contracts in this specialized sector is likely to increase in the short term.

Many 3PLs have already invested and made themselves for the COVID-19 vaccine supply chain, as the temperature requirement might be as stringent as -70°C in the entire value chai according to DHL life sciences and healthcare logistics.



Advancement of digital technologies and advanced analytics across the supply chain is generating a lot of data this is one compelling reason for companies to develop a digital twin, all the warehousing data would be captured and the digital twin can help companies take faster decisions and help in optimizing the processes, Xcelgo is helping many logistics company build their digital twin and streamline their operations.

5G coupled with edge computing would be the key driver in increasing Automated Guided Vehicles (AGV) proliferation, they can help warehouses automate the repetitive tasks, reduce labor costs and increase workplace safety.

The order picking and put away processes performed by AGVs can be coupled with artificial intelligence to automate the quality inspection process by computer vision (vision quality). This can help in reducing errors and improve reliability of warehouses, Amazon has already introduced this in the US and many companies like Conveyco are already big-time player in providing these technologies.


Coronavirus pandemic has been a blessing in disguise for warehousing in the United States, with rise in technology, e-commerce and 3PLs as the key drivers to propel the demand.

Sl noTopic
1Market Segmentation
2Scope of the report
4Research Methodology
5Executive Summary
7Insights from Industry stakeholders
8Cost breakdown of Product by sub-components and average profit margin
9Disruptive innovation in the Industry
10Technology trends in the Industry
11Consumer trends in the industry
12Recent Production Milestones
13Component Manufacturing in US, EU and China
14COVID-19 impact on overall market
15COVID-19 impact on Production of components
16COVID-19 impact on Point of sale
17Market Segmentation, Dynamics and Forecast by Geography, 2020-2025
18Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025
19Market Segmentation, Dynamics and Forecast by Application, 2020-2025
20Market Segmentation, Dynamics and Forecast by End use, 2020-2025
21Product installation rate by OEM, 2020
22Incline/Decline in Average B-2-B selling price in past 5 years
23Competition from substitute products
24Gross margin and average profitability of suppliers
25New product development in past 12 months
26M&A in past 12 months
27Growth strategy of leading players
28Market share of vendors, 2020
29Company Profiles
30Unmet needs and opportunity for new suppliers


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