Warehousing space has never been more critical

The demand on consumer and industrial inventories has never been greater while the availability of storage spaces has never been lower.

The need for wholesale and industrial warehousing space is greater than ever; and Canada’s current supply of available warehouse space is at an all-time low. 

The vacancy rate for warehouse space in the Greater Toronto Area, according to industry sources (as of May 2021), has shrunk to 0.5 percent. Canada’s largest urban region is not alone. Rates for available warehousing space in major cities across the country have fallen to between one and three per cent according to a Bloomberg report (also May 2021). And new demand is threatening to eat up the remaining available storage space across the country. 

When available warehousing becomes in short supply, rental rates increase dramatically. The more affordable alternative is to look at your current footprint and build. That’s where pre-engineered steel buildings become your best solution – they’re affordable, durable and can be built quickly, regardless of the space challenges with existing structures.

Read more about Summit Steel Buildings' logistics and warehouse buildings.

How retail and industrial needs are different

Business operations of all types require space – plenty of protected and climate-controlled space. What we think of as traditional warehousing has been evolving due to the rise of e-commerce. The global warehousing and storage market size is projected to reach USD $650 billion by 2028, from USD $530 billion in 2021 growing at 3.1% CAGR between 2022 and 2028. Companies like Amazon, Shopify and e-Bay, and even traditional retailers, such as Walmart and Hudson’s Bay, are adapting to the new realities of delivery and convenience within their distribution centers. 

Customer expectations are much higher for immediate delivery, competitive prices and free shipping. Inventories must be higher to accommodate increased consumer demand. While brick-and-mortar footprint of retail stores is getting smaller, the industrial one to support and satisfy online orders is growing dramatically. Demand for storage space has pushed companies from the traditional brick and mortar model to more affordable and expandable steel building warehousing solutions. 

“E-commerce requires three times more logistics space than when you have a traditional retail model. So, as we gravitate to more and more and more e-commerce, all that product that was in the store shrinks and the industrial footprint goes up,” says Marshall Toner, Managing Director/National Lead, Industrial for JLL Canada. 

And it’s not just warehousing for the retail industry. Commerce in many sectors (i.e., manufacturing, processing, supply chain, logistics) quickly bogs down when business operations go without adequate working space. A recent incident reported by the Windsor Star explained how the associated costs of not having enough space can affect the local economy. Three ships loaded with steel had to be turned away from the Port of Windsor because a critical shortage of warehousing meant there was no place to put the many thousands of tons of specialized metal in their cargo holds. 

Real world meets the digital one 

The lack of space to unload and store materials is an interesting intersection where physical old-world (IRL) restrictions converge with the labor-saving convenience that only comes with emerging technology. While purchasing demands, inventories and storage space increase, the potential to track and keep all its related information is becoming easier. The “Internet of things” is a digital transformation that is not only changing how consumers interact with devices, but also their customer journey (online ordering and shipment tracking). It is similarly transforming how logistics are managed along the supply chain and within a warehouse. Buildings once used to store physical good are additionally being used to house revenue-generating digital inventories – think of banks of webservers as data storage or servers used in crypto mining. Warehouses now rely on technology for both their management and financing.

Meeting the storage needs of today by building for the future

Inventory will always be a huge cost and valuable investment. Goods and data need to be inventoried, protected, tracked and handled with care. Throughout their storage lifetime, facilities must be a proper environment to safely secure inventories, so items don’t get lost or stolen or rot. As large as these warehouses get, technology – such as NFC tagging and continually tracked barcodes – can be built into their infrastructure to help keep the vast inventory well organized and easy to navigate. Supervised inventories prevent obsolescence and spoilage. A well-built and well-maintained warehouse creates a suitable environment for both workers and products – an important factor in guaranteeing your quality and reputation.

Summit Steel Buildings has the custom warehousing solutions that can be built quickly and cost effectively to meet your unique business challenges. We can provide you with increased operational capacity that will meet your short- and long-term business goals through out leading-edge technology and exceptional customer service. Contact us for your free quote.