How to Deal with Warehouse Shortages

It’s no secret that the housing market is hot, hot, hot right now! With high demand and low supply, houses are going for far more than they are worth. It seems to be the same experience with commercial real estate and warehouse spaces. During the summer of 2021, many people assumed it was the beginning of the end of COVID-19. The anticipation of the end of the pandemic was accompanied by experts predicting the return of consumers to in-store retail. Experts were forecasting a slowdown of e-commerce sales and with that, they expected the need for warehouse space to slow. That has not been the case as commercial real estate has exploded with more companies expanding their online capabilities. 

In a January 2022 article, Bloomberg reported, “Pandemic-era warehouse purchases by the five biggest retailers on the S&P 500 index are three times the number in the corresponding prior period, with online behemoth Amazon.com snapping up the lion’s share of 21 facilities compared with four before.” 

Renomy, which is a machine-learning algorithm bought by a global commercial real estate company, looked at transaction property data from more than 3,000 US counties commercial facility data. Patrick Rafferty, VP of product engineering at Reonomy states, “industrial occupancy rates are at an all-time high, so there’s no doubt that the demand for industrial space is at an all-time high… Consequently, there are more buyers entering the market to purchase industrial properties.” 

New construction has continued to expand, as well as existing property. Generally when new construction is on the rise it means that there is a short supply of existing properties. 

The lack of warehouse space is frustrating and costly. If your business doesn't have the money to purchase warehouse space, the best thing to do is to rent space within existing infrastructures and get creative.  Naturally warehouse space is efficient for a reason but it doesn’t mean that it can’t work in another space. For example, with companies turning to partial or full time remote work, commercial office space is a viable and cheaper option than warehouse space.  While online retailers prepare to fulfill incoming orders, there becomes a certain point when garage space and storage units are not enough. 

With warehouse shortages, it is important to look at other methods like fulfillment centers and distribution centers to keep up with demand. Fulfillment centers are more focused on quick turnaround, and offer more value-added services like packaging, shipping directly to customers, and managing returns. Distribution centers fall somewhere between traditional warehouses and fulfillment centers, offering a larger storage capacity, but they tend to ship less frequently.

If you are selling larger items or receiving large shipments that cannot be unloadable except for a loading dock, then look towards 3PL’s. 3PL’s or Third Party Logistic companies are companies that specialize in fulfillment, generally in the e-commerce space. They not only store your items but they sort, pack, and ship charging you based on their companies pricing structure. A 3PL is not right for every company but it is a great alternative to the warehouse shortage. It’s important to weigh your options and not let this shortage slow your ability to grow. 

How DesktopShipper Can Help

There will be a time in your supply chain when shipping product is required regardless of the inventory storage option chosen, so it is important to have a shipping solution in place. In addition to integrating directly with your e-commerce platform, DesktopShipper has also partnered with many third-party logistics companies (3PLs) and warehouse management system providers to help manage end-to-end fulfillment operations. Furthermore, you can track packages created by DesktopShipper throughout their journey so that you can see whether they are inside of a fulfillment center, distribution center, or on their way to the customer.

Learn how DesktopShipper can simplify your order management, fulfillment, and logistics journeys from inventory and order management to carrier pickups and deliveries by signing up for a free demo today!