Market Overview

The warehousing and storage services market expected to register a CAGR of 10%, during the forecast period, 2020-2025. According to Metapack as of July 2018, 55% of consumers globally reported that they want eCommerce providers to offer one-hour delivery in metropolitan areas of their country. The demand for availing fast service helps the warehousing and storage services market to expand.

  • Moreover, the increasing demand for an omnichannel retailing model is further expected to drive the market. Recently in earlier 2019, Pepperfry announced that they are investing USD 12 million (over Rs 85 crore) this year to sets up over 100 offline stores and strengthens its supply chain operations to reach more customers. Though the online buying trend is embracing, customers 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 storing market.
  • Further, products like fresh agricultural produce, frozen food, photographic films, chemicals, and pharmaceuticals are sensitive to temperature change either due to a smaller shelf–life or due to their sensitive chemical composition. To avoid such damage, refrigerated warehousing and storage services are used to keep the product safe. Thus, with the increasing demand for agricultural products, are pharmaceuticals are expected to have a positive outlook on the market globally.
  • However, the high cost of constructing warehouses and high maintenance costs are few factors restraining the market during the studied period.



Scope of the Report

The warehousing and storage services market detailed analysis on the basis of its types, ownership and geographic regions such as North America, Asia. Europe, Middle East, and Africa and Latin America. North America is expected to have the largest market share while Asia-Pacific is expected to be the fastest-growing region.

Key Market Trends

Refrigerated Warehousing and Storage is Expected to Grow Significantly

  • According to the Bureau of Labor Statistics, the average annual expenditure on frozen prepared foods amounted to USD 145.17 per consumer unit by 2017, while in 2016 it was USD 130.3 per consumer. Therefore to serve the increasing demand for frozen foods, according to the US Department of Agriculture, 32 thousand pounds of vegetable processing were produced for canning while 5 thousand for freezing in 2018. Thus, to avoid any damage to frozen or canned foods, refrigerated warehousing and storage are the best suitable option, thereby increasing the demand of such a warehouse.
  • Moreover, the Care Quality Commission recommends that insulins, antibiotic liquids, injections, eye drops, and some creams must be stored between 2?C and 8?C 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 was 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.
  • Seeing the demand for refrigerated warehousing and storage, companies are entering this segment to gain competitive advantage and expand their geographic presence. This trend is expected to influence other vendors to expand their presence as well.
  • For instance, in October 2019, United Parcel Service Inc announced that they are expanding their capacity to handle its recent health-care investment. The expansion would add 1.3 million square feet of dedicated health-care warehouse space and distribution network around the country which aims 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.
  • Hence, all the above factors are expected to create a positive outlook on the market, thereby, helping the market to expand.



Asia- Pacific to Witness Fastest Growth

  • Asia-Pacific is expected to witness the fastest growth because of the increasing penetration of e-commerce and the increasing purchasing power of the consumers in the region.
  • Moreover, India which is the second popular country in the world has a predominantly consumption-led economy. According to a report by the Centre for Monitoring Indian Economy in Q1 2018, the consumption growth rate in India was 6.6%, which was much higher than most economies in the world. Therefore, companies are seeing this as a huge opportunity, and thus expanding their presence in the country, thereby increasing the demand for the warehousing and storage services market.
  • For instance, in March 2019, FM Logistic is building a multi-client logistics facility (MCF) in Haryana( North India) and is expected to be completed in December 2020. This warehouse would have a storage capacity of 100,000 pallet positions and provide a dedicated area for co-packing and other value-added services. This would help their clients to serve customer demand in the region.
  • Therefore, all the above factors are expected to have a positive outlook on the market.



Competitive Landscape

The warehousing and storage services market is very competitive in nature mainly because of the presence of local players in the region. The competition is expected to further intensify in the future because of the relatively low barriers to entry that encourages new entrants to enter. Logn term partnerships, mergers, and acquisitions and high investment in the warehouse management software are the prime growth strategies adopted by the companies to sustain the intense competition. Vendors like DHL Supply Chain, XPO Logistics, Inc., and FedEx Supply Chain are few key vendors. Few recent developments are:

  • October 2019 - Deutsche Post DHL Group plans to invest USD 2.2 billion on digital initiatives through 2025. The new steps include stepping up the use of warehouse automation and robotics, applying data analytics to optimize routes and improving volume forecasting and developing technologies for use across the company’s business lines. Such advancements in technologies will help the company to maintain its global leadership in the market.
  • July 2019 - DHL Supply Chain has implemented its first smart warehouse in the Asia Pacific region with the digital twin technology, which involves using digital models to better understand and manage physical assets. DHL Supply Chain has implemented an integrated supply chain solution for Tetra Pak’s warehouse in Singapore. This twin technology is helping the warehouse supervisors to use real-time operational data to make informed decisions to reduce congestion, improve resource planning and allocate workload.



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