North America has seen a sharp rise in recent years in warehouse leasing from logistics players across the region. The increasing service levels, such as e-commerce and same-day delivery, are influencing retailers to further outsource their services. Many small businesses and local companies in the U.S. rely on external warehousing to contain their costs.
E-Commerce Market Overview
The fastest growing e-commerce market in the region is Canada while the US market is the largest market and it is growing steadily. The e-commerce user penetration is relatively low in Mexico and the Mexican e-commerce market is expected to witness healthy growth rate in the next 5 years.
The majority of e-commerce companies award contracts to logistics service providers to provide warehousing and distribution service. The high velocity e-commerce business models necessitates the companies to have technological solutions that increase the speed of the fulfillment processes.
Contract Logistics Market
The major contract logistics players in the North American market are DHL, XPO Logistics, UPS, FedEx, DB Schenker, Ryder System. However, the contract logistics market in North America is fragmented with large number of players operating in the market and providing services at various levels. The companies are following the trends of consolidation and expansion to gain foothold in the market. For instance, In 2018, DB Schenker opened three new contract logistics facilities in US to accommodate both existing and new customers and moved one existing location to a much larger facility. The company expects to open another six or seven contract logistics facilities by 2020.
Automotive Supply Chains in North America
Logistics companies play a predominant role in managing the North American automotive supply chain. Most of the vehicle production in Mexico depends on several key components such as engine, gearbox, etc, which are sourced from the United States.
On-demand and Cloud Based Warehousing
With the emergence of e-commerce, start-ups related to on-demand and cloud based warehousing are gaining popularity. Companies like Waredock, Flowspace and Flexe offer flexibility to the companies in terms of using the warehousing space according to the seasonal demand instead of long-term contracts for a fixed space. This presents tough competition to the existing traditional contract logistics service providers.
Warehousing and Storage Market Size
Businesswire expects that North American warehousing and storage market reaches $86.41 Billion in 2024. The North America warehousing and storage market value in 2018 was $ 71.9 Billion.
Waredock in North America
Waredock is more than a warehouse listings page. Our vision at Waredock is a geographically dispersed distribution infrastructure that is enabled by data insights across the supply chain. We are working with North American 3PL companies, property owners, businesses small and large in a range of industries. We help businesses get greater coverage in more markets. Our network includes every warehouse type, with the certifications and designations to store any specialized product. And, we’ll provide picking, kitting, shipment consolidation, and more.