Even with Warehousing & Distribution costs rising nationwide, FW Warehousing continues to grow, but why? There are ten key trends impacting the North American distribution market, but FW hasn’t let that affect productivity.
According to Logistics Management the following are the ten key trends impacting the North American distribution market:
- Oil Prices: Rising oil prices have resulted in companies re-evaluating supply chains and distribution networks to offset cost increases. Companies in some sectors, where high levels of customer service is required, are expected to expand the number of cross docking facilities in order to reduce the overall distance to customer destinations, hence reducing fuel costs and delivery times.
- Increases in Inventory Levels: As oil prices and supply chain risks increase, inventory holding levels are expected to rise. As a result of higher transportation costs, many shippers are likely to move away from quick and frequent deliveries to slow and less frequent shipments, thus driving up inventory.
- E-commerce: To support online sales, many brick and mortar retailers are expanding their distribution facilities. While many retailers utilize mega-distribution facilities to support both online and in-store inventory, other retailers and building separate, more specialized facilities to support their e-commerce division.
- Intermodal Transportation: Transport of freight via several modes of transportation has increased over the past few years. This has lead to the construction of intermodal hubs. Not only are these serving as transfer points, but more and more of them are becoming logistics hubs.
- Larger Space: Throughout 2010-2011, companies took advantage of lower vacancy rates and “traded-up” to larger warehousing and distribution facilities. Many markets are experiencing a shortage of large, quality blocks of space.
- Near-shoring: Shifts toward regional supply chains has resulted in manufacturing moving closer to customer-bases.
- Containerized Imports: Over the past ten years, containerized imports have become one of the most important drivers of demand for warehousing and distribution centers in the U.S. Although this will continue to be the case, the focus of growth for distribution property locations is likely to change. The development of ports in Canada and Mexico poses a threat to U.S. West Coast ports.
- Panama Canal: The expansion of the Panama Canal, scheduled for completion in 2014, is a driving force for port infrastructure activities across the region. With two-thirds of the U.S. population located east of the Mississippi River, many of the products that had previously been transported across the country from the West Coast after delivery from Asian markets may now remain on vessels all the way from Eastern ports.
- Sustainability: Sustainability measures have been on the rise for many businesses for a variety of reasons.
- Trade with South America: Trade was steadily increased between the U.S. and South America and Brazil, which is one of the largest trade partners of the U.S.
With all of these trends affecting the marketplace it’s no wonder the distribution market has taken a hit, but FW Warehousing is taking advantage of the opportunity to improve its staff, services and locations and continue to grow through the Midwest.
FW Warehousing offers solutions to Warehousing & Distribution that are fair and cost-effective to its client. In the age of tightened budgets and streamlined work-flow, it is important to have a Warehousing & Distribution partner committed to helping your company succeed and prosper.
FW Warehousing is headquartered in St. Louis, Missouri with Midwest warehouse distribution centers in Kansas City, Indianapolis and St. Louis totaling more than four million square feet. Founded in 1949 with a focus on food-grade storage, FW later broadened its services to include contract warehousing, dry storage, hazardous material and chemical storage, temperature-controlled storage, product distribution and B2B and B2C fulfillment.
FW Warehousing has more than 50 years of experience in third-party 3PL logistics and has been ranked in the top 100 Third Party Logistic Companies in the country by Inbound Logistics magazine.
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