Warning: No more storage place?

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Why is there no storage place?

When you consider it, it becomes clear that online buying is on the rise. And taking the pandemic into account, eCommerce is more robust than ever.

The logistics of warehouses are being strained by emerging consumer behaviors. With the continuous reliance on just-in-time delivery, more and more businesses in urban areas are dependent on the availability of warehouse space, and as a result, small and medium-sized warehouses are full. In addition, a lot of medium-sized logistics firms don’t truly utilize their warehouse space since they don’t have the necessary flexibility.

This evolution provides a problem for industrial and commercial businesses, but it also presents an excellent opportunity to reconsider and test out new approaches. After all, warehouses can provide genuine competitive benefits in addition to being a place to keep things at the lowest cost.

How does this affect Supply Chains?

Unreliable global supply chains and severe raw material shortages suddenly made warehouse capacity a competitive advantage for industrial and trade enterprises. Many businesses purchased essential supplies to get ahead of supply delays. However, this resulted in goods sitting in storage facilities until they were processed while they awaited the arrival of other parts.

Naturally, some businesses then began producing goods on-site in their respective sales regions to reduce reliance on global supply chains. As a result, warehouse space is in even greater demand. Particularly smaller warehouses are quite well-liked.

Warehouses in Germany and the rest of Europe

Approximately 4 million square meters of logistics real estate were occupied in Germany in 2010, while 6.6 million square meters were occupied by 2020, representing an average annual growth rate of 5.1%.

Although construction activity has more than doubled since then, it is still falling short of the enormous demand due to issues such as a lack of suitable land, rigorous planning regulations, and rent rises in the country’s five major cities. Real estate for warehousing is experiencing a severe constraint. This raises the issue of whether creating more of the same kind of space is necessarily the best solution. In the long run, new models or the usage of existing warehouse space will change how continuous demand is met.

Read more about how you can improve your logistics operations with digitalization