What’s Behind the US Storage Market Boom?

16 May 2024

It has become imperative for businesses to have adequate storage space to store their goods so that they can provide a timely response to consumers and customers.

 

The pandemic forced changes that are here to stay. One of them is the growth of the storage market, driven by industries such as automotive, manufacturing, retail, technology, and even healthcare.

Why is this trend related to the global health crisis caused by Covid-19? Mainly because it has further strengthened e-commerce and with it the customer experience that demands near-instant delivery. In addition, companies have realized the value of holding stock, especially in the context of a US economy facing inflation and uncertainty not seen in years.

At the same time, the world is embroiled in conflicts that seem far from resolved, driving up logistics costs. As a result, stockpiling is an option that offers productivity and cost benefits in the short to medium term. Many still remember the container crisis that unfolded during the pandemic. In this context, it’s better to secure goods, especially if a company is targeting the external market, where failure to meet delivery deadlines is a cardinal sin.

When it comes to numbers, there’s nothing like looking at what’s happening in North America, where the storage market is expected to reach $84 billion by 2022 and $97.9 billion by 2028.

Part of the answer to this forecast has to do with the growth of commerce in the United States. When the country was expected to end 2023 with a recession in the final quarter, its GDP grew by 0.8%, according to the Bureau of Economic Analysis, part of the Department of Commerce.

Even Technavio, a market research firm, claims that the storage sector will experience a compound annual growth rate (CAGR) of 6.62% through 2028. This data is stated in their study Global Warehousing and Storage Market 2024-2028, which also ensures that this development will occur mainly in regions such as North America, Europe, South America, the Middle East, and Africa, in order of impact.

Warehouse, warehousing, United States

What about industries?

According to Technavio’s study, the industries driving this market are all those related to the manufacture of goods – with telecommunications and technology standing out – and the sale of these goods (both wholesale and retail), agriculture (from the storage of seeds and agrochemicals to crop management and transportation), everything related to refrigeration, and healthcare.

Importantly, this growth is being driven by process automation, which makes everything from administration to product preservation more efficient.

Another trend that is spreading across industries is nearshoring. In the case of warehousing, for example, trade between the United States and Mexico is boosting refrigerated logistics, one of the verticals with the greatest short-term projection.

Blockchain, traceability, and sustainability

While the upward trend in this market is creating great expectations among companies in the industry, they must consider three key elements for this positive trend to continue. The first key is that the industry must provide good asset traceability, which is guaranteed by blockchain technology. Furthermore, this tool increases security and reduces fraud rates in the market.

In addition, as a second instance, data and the incorporation of the Internet of Things (IoT) will be essential to offer a complete analysis and ensure the quality of storage. These two elements are crucial for e-commerce management and last-mile delivery, allowing retailers to monitor their sales at all times.

The third ingredient that the storage market must offer is sustainability: providing figures on carbon footprint and greenhouse gas emissions, as international organizations are demanding that the impact of activity be reduced.

To have a concrete idea of the importance of this issue, global funding for logistics startups has decreased, except for those that prove to be sustainable: investments in them increased by 16 to 36% last year. These are the ones that are most open to gaining a market in development, as global trade in goods will grow by 3.2% in 2024, according to the World Trade Organization (WTO).

The need for talent

The supply chain market, and by extension the warehousing market, is growing so fast that recruiters say they are seeing an increase in requests for specialized logistics talent every day.

“Due to the unlimited potential opened up by e-commerce and the digital economy, more and more companies are demanding logistics professionals to efficiently manage their storage, shipping, and distribution processes,” says Randstad, noting that the technology industries generate the most requests.

So much so, that another staffing firm, ManpowerGroup, ranks this talent among the top five most in-demand worldwide. In that sense, the reasons are partly in line with what we have pointed out: “Globalization, the increase in mass consumption, and the growth of e-commerce are phenomena that encourage companies to develop internal capabilities in e-commerce.”

“Therefore, having employees who can optimize resources in terms of warehousing, inventory management, and distribution is extremely important for the smooth operation of companies in the current context,” says ManpowerGroup.

Aerodoc’s solution

At Aerodoc, we have our warehouse in the U.S. (Florida) and a network of agents in more than 172 countries to provide global warehousing and fulfillment services that help companies expand their reach without incurring significant capital and infrastructure investment costs.

In addition to warehousing, we transport, receive, and manage our customers’ goods, enabling them to operate in multiple countries simultaneously through a single point of contact.

As a result, over the past two decades, we have become a premier logistics center for satellite, telecom, and IT companies (data centers, AV technology, technology resellers/integrators).

Our customers have high-unit-value goods and see us as the ideal operator because of our 25+ years of experience in these industries and the benefits we provide, such as cost savings and faster time to market.

Topics on this article: United States | Warehouse | Warehousing

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