Articles by Month: January 2020
Warehousing is a necessity for moving goods throughout the supply chain. For Northeast Ohio companies, the cost of a Cleveland warehouse lease is a key consideration when calculating the business operating budget. Because warehouse space leasing works differently than other types of commercial real estate leases, prices can vary widely. It’s necessary to have a good sense of your own needs to understand how third-party logistics warehousing firms determine their rates.
Most businesses don’t need an entire warehouse dedicated to their operations. That’s why many opt for a third-party warehousing and distribution service. On Time Delivery & Warehouse aims to make the terms of our Cleveland warehouse lease rates as fair and transparent as possible – so you can be confident you’re getting the best rate for the space and value-added services you require.
This is especially important given the warehouse market insight recently published in the Journal of Commerce Annual Review and Outlook. Industry analysts opine warehouse lease rates are likely to continue climbing through 2020, with the average rent increase for industrial properties nationally expected to exceed 5 percent for the fifth year in a row.
Analyzing Your Company’s Warehouse Needs
To begin your search for the best warehouse rates in Northeast Ohio, we recommend starting with an accounting of your own business needs. This will help establish a general price range and give our 3PL team an idea of which warehouse package is best for you.
Like the national trucking industry, Cleveland trucking companies have been working to acclimate to rapid changes and significant challenges that have cropped up in recent years. Among these:
- Too much capacity (mostly added to the market in 2017 and 2018, followed by freight market slowing in 2019);
- Depressed spot rates and contract rates;
- Rising carrier costs (including insurance, equipment and driver wages);
- Higher demand for faster deliveries;
- Driver shortages;
- Increasingly stringent federal safety regulations (with more hours of service rules likely on the way).
Although some of this was actually good for shippers (lower spot and contract rates, for instance), the trucking industry saw a wave of bankruptcies (nearly 800, according to FreightWaves.com). While concerning, the upside of this is that national trucking overcapacity was reduced by about 24,000. This is why highway transportation experts at the recent National Industrial Transportation League summit expressed “cautious optimism” about 2020.