Quarterly Report for On-Demand Warehousing Pricing and Usage: 2016 Summary
We wanted to know how pricing and usage of on-demand warehousing trended in 2016. Here are the numbers.
For years, the supply chain has been the same: weighed down by outdated processes and technologies. In today’s market, that doesn’t cut it anymore. Meeting market demands and staying competitive requires real-time visibility into every area of the business and solutions that make it easier to adapt to change.
In supply chain, traditional methods for managing inventory fluctuations with short-term solutions hasn’t been simple. “Short-term” has often meant manually searching for space and entering into a full-year lease. So, there’s nothing “short-term” or dynamic about it. Technology has changed that.
Today, there are new, innovative applications that provide visibility and control throughout every stage of the supply chain. From electronic document management to real-time visibility into transportation logistics, software is modernizing the supply chain. On-demand warehousing is no different.
FLEXE has been providing easy-to-use, short-term warehousing solutions since 2013. Our goal is to help supply chain professionals make better use of their time and money. Whether you’re an organization in need of capacity and fulfillment services or a business that has some to spare, FLEXE’s marketplace helps you find what you need. There are no leases or long-term commitments, just an easy, on-demand solution.
The Results Are In
Throughout the year, we release quarterly reports on the pricing and usage data from the FLEXE network. It is an illustration of how on-demand warehousing is being used across North America—enabling FLEXE customers and partners to view a benchmark of marketplace data.
In the On-Demand Warehousing Pricing & Usage Report: 2016 Summary, we take a look at all four quarters in 2016 and compare year-over-year data for Q4 2015 and Q4 2016. Data is broken down by pallet storage type (stack, rack, and floor) and also by region (western, central, and eastern).
The 2016 summary uncovered two distinct trends:
- The number of warehouse partners in the network has increased significantly over the last year, which shows more partners are seeing the value of the marketplace and creates more location and warehouse partner options for customers
- The duration of pallet storage has decreased over the last eight quarters, denoting more customers are leveraging available warehouses for fulfillment centers instead of just short-term, lease-free storage
The Demand for New Warehousing Solutions Increases
For warehouse operators, the choice to list available space is a no-brainer. Many suppliers have enough excess capacity throughout the year to capitalize on the empty space and the ability to provide handling services.
Since 2013, the number of providers in the marketplace has steadily increased, most notably between Q2 and Q4 of 2016, when more than 100 warehouses were added to the marketplace. Additionally, paid rates for all three storage types remained steady—barring the Q4 seasonal spike—denoting market growth and stability across the network.
Leveraging On-Demand Warehousing for More than Overflow
In order to compete with industry giants, businesses have to both cut costs and expedite delivery. That’s why a lot of businesses are turning to on-demand warehousing to solve for more than just inventory overflow.
In terms of fulfillment, on-demand warehousing enables an organization to augment its distribution network by adding more fulfillment centers while saving it from long-term contracts and high shipping rates. It’s a new level of agility for the supply chain.
From the 2016 Summary, it’s clear that more businesses are testing fulfillment services through the marketplace. Between 2015 and 2016, pallet storage duration has steadily declined, which illustrates customers are able to be even more strategic with inventory allocation when leveraging on-demand warehousing.
Don’t miss the insights available in the On-Demand Warehousing Pricing & Usage Report: 2016 Summary. Get the report to inform your own supply chain strategy.
If FLEXE’s solution for on-demand warehousing will help you improve your supply chain, contact us or give us a call directly at 1.855.733.7788. We’re here for you.