3PL news: Armstrong report says U.S. commercial warehousing market is at $37.5 billion

The commercial warehousing market continues to grow as companies continue to find value in outsourcing their warehouse operations.

By Jeff Berman, Group News Editor -- Modern Materials Handling, 6/12/2008

New research recently published by supply chain consultancy Armstrong & Associates indicates the commercial warehousing market in the United States has hit $37.5 billion.

This tally tops last year’s data, which came in at almost $33 billion. The market growth rate for 2007 was 7.7%, compared to 9.7% in 2006.

The report estimates the number of U.S.-based commercial warehouses at 8,000 with 1.3 billion square feet of space. This exceeds last year’s figures of an estimated 7,900 commercial warehouses and 1.25 billion square feet of space.

According to the report, commercial warehousing makes up one third of the entire U.S. warehousing market.

“I think [shippers] continue to look at outsourcing activity because they can use someone who performs commercial warehousing tasks as a core competency and then concentrate on what their companies do best,” says Richard Armstrong, president of Armstrong & Associates. “It is a matter of finding somebody who will economically provide high-level service…and there are a host of those kinds of providers that have developed these services in the U.S. market in particular.”

As far as the day-to-day services the contract warehousing model provides for shippers, Armstrong cited the following as the most common examples:

• IT capability and familiarity with a host of warehouse management systems
• experience with value-added services

Armstrong cited Kenco, Genco, Menlo, UTI Contract Logistics, Kuehne and Nagel, and Saddle Creek as some of the major players in the U.S. commercial warehousing marketplace.

Armstrong & Associates report, “Warehousing in North America—2008,” is now available. For more information, go to www.3plogistics.com or call 608-873-8929.