We’ve reached the point where every segment of the global supply chain is impacted by e-commerce.
The momentum generated from a buying experience that can be completed in a matter of a few clicks is changing the strategies of manufacturers and couriers alike. And, as we've pointed out, the economics of supporting industries like commercial real estate are being disrupted as the point of sale shifts increasingly to an online channel enabled by a last-mile delivery option.
For many people these developments are bad news as shopping malls sit empty, and a wide range of sales, clerical and administrative jobs are eliminated due to technological efficiencies.
And then we have warehousing where the going is great and about to get better!
Warehousing: The Next Prime Real Estate in Logistics
No longer the dimly lit spaces with dirty floors and crushed cartons, warehouses are now among the most critical nodes of the global supply chain. If you want to see sci-fi technology like robots or autonomous vehicles in action, skip Hollywood or MIT and go straight to a warehouse to watch the magic. The more automated and technologically equipped warehouses are getting, the more valuable they are becoming to retailers, consumers and the world’s economy in general.
How can we tell? Just look at all the investment dollars pumped into warehouse logistics in 2019:
- Warehouse startup Flexe, which runs a marketplace for on-demand warehousing, just raised $43 million in investments
- Stord, a warehouse technology startup that helps users market or find unused warehouse space, just raised $12.4 million
- Flowspace, which provides on-demand warehousing and fulfillment assistance for small to medium-sized companies, raised $12 million as part of their Series A round
As logistics professionals, this makes perfect sense to us: going to stores takes time and effort. E-commerce retail eliminates that time and effort and gives it back to people at no additional cost--or perhaps even with extra savings tacked on.
However, retail sales have continued to grow, which means the old stock room has to extend. If that sounds familiar, it’s because the shop floor has already stretched to the consumer’s doorstep. Now, with increasing demand, the shop floor is extending further up the supply chain.
Technology platforms that enable greater visibility and efficiency in the renting and management of warehouse space are going to make warehouses more efficient and capable of adding velocity - not friction - to the flow of goods in all sectors.
Of course, when we read words like “velocity” and “frictionless,” fears about the place of people in the supply chain (understandably) pop up. If warehouse development and e-commerce demand proves the supply chain is getting faster, can human beings keep up?
Grab Your Stopwatch
The speed and ease of acquiring and re-selling capacity in trucking, warehousing and last-mile delivery have brought us to the point where measurable gains in quoting and booking should be observable soon.
Will it happen? What will those gains look like? How will we know they’re even happening? Who’s going to keep track?
That’s right! Warehouse “on-hand” notices, trucking bills of lading and a slew of other documents are moving from paper and facsimile to bytes and dashboards, but the transactions are still executed and managed by logistics companies such as freight forwarders, NVOCC’s, third-party logistics providers, etc.
While freight forwarders most certainly face considerable challenges from the digitization of the supply chain, they also have great opportunities on which to capitalize. The volume of global trade data that passes through these companies daily and the ability to manage and execute on the opportunities those data flows create will be the future value add of today’s forwarders. It’s time to grab the opportunity.
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