Coronavirus and the Warehousing Industry
The coronavirus pandemic has caused significant impacts on most industries. Warehousing is no exception- with an expected market decline and changing logistics, there may be a new normal for the industry going forward. Here’s a look at some of the ways the coronavirus is impacting warehousing.
Coronavirus drove unpredictable demand
One of the primary impacts on the warehousing industry has been unpredictable consumer behavior. During the pandemic, some products have experienced severe drops in demand, while others have soared. This means disruption for supply chains and warehouses that must attempt to meet demands that shift daily. Some products have experienced significant backlogs, while others have piled up in warehouses across the world.
A driving factor of this behavior has been the differing timelines of disease spread and response around the globe. Early in the pandemic, the disease was primarily spreading and being responded to in China, and Western demand for Chinese-made products remained high. As China exited lockdown and began shipping products West in anticipation of demand, the coronavirus took hold in Europe and North America, where demand sharply decreased. The products that had been shipped then simply sat in warehouses, with little demand to move them into consumers’ hands.
Current market decline and expected recovery
The coronavirus pandemic has already taken a toll on the warehousing industry. A report from April 2020 titled “Warehousing And Storage Global Market Report 2020-30: Covid 19 Impact and Recovery” projects that the global warehousing and storage market will experience a -0.1% compound annual growth rate (CAGR) in 2020. This means an expected market value of $450.7 billion in 2020, after a value of $451.1 billion in 2019. It’s not all bad news, though. While this decline seems certain, there is hope for a recovery in the next few years. The report projects a recovery with a 10% CAGR from 2021-2023, with the market value soaring to $582.9 billion by 2023. So, while there has definitely been a significant impact, the report projects a significant recovery and growth long-term.
Acceleration of automation and smart warehousing
Automation and smart warehousing are not new practices. However, given the challenges a pandemic imposes upon people in workplaces, they will likely accelerate as solutions. Greater technology in warehousing will create more resilience and efficiency, and a greater ability to adapt in the face of disease outbreaks. Plus, with many interest rates dropping and government incentives for capital purchases, investing in technology is more appealing than ever. These factors will likely converge to drive automation and smart warehousing in the industry.
With a swiftly changing market, flexibility has never been more important in warehousing. JP Property Management specializes in customized warehousing for our clients’ needs. We understand the ebb and flow of business and can work with you to come up with a tailor-made solution for your products. Whether you need seasonal storage space, long term warehousing, or anything in between, we are happy to accommodate your needs. Interested in learning more? Give us a call at 502-550-7126 or visit our website today to learn more and request a quote!