For retailers and logistics stakeholders, finding enough warehousing space is bleak currently. Some retailers are even turning to flexible warehousing to help handle increased inventory, as the real-estate market has been not ideal.
Additionally, U.S. transportation and warehousing employment has seen a slight boost in August this year. However, that’s not to say that it’ll stay that way.
The Search for Warehousing Space Continues
It’s been a struggle for some U.S. shippers finding adequate and enough available warehousing space for their commodities.
Some of the reasons for these warehousing shortages are due to low vacancy rates, delivery delays, and rising costs for space and service – the Journal of Commerce details.
Additionally, industrial rents have rose over twenty percent year-over-year in the second quarter – now around eight dollars per square foot, JOC reports. They do note though that inflation has played a role in these rising costs, as well as increase in interest rates and less available space.
So how are retailers and manufacturers dealing with warehouse challenges?
Implementing better sortation systems, adding in robots, as well as incorporating warehouse management systems throughout distribution networks are a few ways some are doing to deal with current challenges.
Furthermore, some suggest to use more direct shipping (if/when possible) that will skip intermediate warehousing and storage.
U.S. Transportation and Warehousing Employment in 2022 Sees a Boost in August
In August, U.S. transportation and warehousing businesses added 20,300 actual, adjusted jobs. Which is a nice boost from 36,200 jobs in July.
In the past four out of the past five months, warehousing jobs have dropped. They fell to 21,000 since their peak in March, to 1.75 million. In August alone, 1,500 jobs were lost – according to the U.S. Bureau of Labor Statistics.
So, what could be a reason for this?
Well, this likely shows that the industry is operating at or close to capacity, as the Journal of Commerce notes, vacancy rates in many markets are below two percent and many expansion projects have been delayed.
We will continue to provide updates on the latest in the industry and more throughout the year and beyond. As always, should you have any questions or comments, please don’t hesitate to reach out to our team today!