This Month in Modern: ProMat 2019 attendees showing measured optimism

If you’re reading this column, there’s a good chance you’ve already made your plans to attend ProMat 2019 (April 8-11), the materials handling industry’s leading trade show and educational conference, sponsored by MHI. According to all reports, this year’s event will welcome more than 45,000 visitors who will roam more than 420,000 square feet of exhibit space—a new record—in the North and South halls of Chicago’s McCormick Place.

And if you do, in fact, have your plans set, our latest data tells us that you’re going into this year’s event with plenty of confidence. However, while optimism is strong, you may be harboring a more measured approach to figuring out the right mix of investments to keep pace with your new requirements—and you may even be considering some outside help.

These are some of the high-level sentiments running through the findings of our “2019 Warehouse and Distribution Center Equipment Survey,” an annual study conducted on behalf of Modern by Peerless Research Group (PRG) that sets out to reveal the economy’s impact on warehouse/DC equipment, technology and software buying decisions.

The study is now in-house, and editor at large Roberto Michel is currently sifting through the data to put context behind all the findings for the April issue of Modern.

“This year’s data certainly shows a healthy spending outlook, but a bit more subdued that last year’s very bullish numbers,” says Michel. “I get the sense that managers of DC operations are just exerting caution and figuring out the next smart moves.”

Conducted over this course of January 2019, we found that 32% of respondents were proceeding with investments given the state of the economy, down from a 42% response to the same question in January 2018. According to Michel, that 32% level is more in line with the 35% for the “proceeding with” response in 2017 and above the 28% in 2016.

However, those taking a “wait-and-see” approach on materials handling investments and related technologies was 34% this year, up from 29% last year. “Volumes are good and the economy is generally still strong, so things are pretty good all around,” says Michel. “However, there are opposing forces out there like the inability to easily add labor, higher costs for warehouse space, and more labor-intensive piece picking that require some hard thinking and meticulous planning.”

And it’s that growing complexity that may be causing more operations to consider turning to a little outside help from third-party logistics (3PL) partners. When asked about specific spending categories under evaluation over the next 12 months, 16% cited 3PL services, up by 6% from last year.

“We weren’t surprised to see growth in that number,” says Michel. “Operations are clearly being asked to do more and more to meet e-commerce fulfillment pressures, and now there’s a bit of hesitancy on what to do next. Turning to a 3PL could help to offset those rising fulfillment and labor pressures that are prevalent.”