What’s the difference between a tire and a tin of tomatoes? Ok, a lot – especially when it comes to inventory storage and shipping requirements. Tomatoes, like all foods, skin products, medicines, vaccines, veterinary supplies and medical devices made or sold in the U.S., are regulated under stringent safety rules and guidelines set by the U.S. Food & Drug Administration for storage and shipping. The FDA is responsible for assuring the safety, efficacy and security of many human and animal products. For companies that sell these goods, FDA registered warehousing is essential to ensuring both regulatory compliance and customer confidence.
Recently, a new report indicates the global refrigerated warehousing and storage market (which includes blast freezing, tempering and modified atmosphere storage services) is expected to grow from $112 billion in 2020 to more than $164 billion in 2025. This growth is driven by several factors, including consumer demand for quality manufacturing and transparent sourcing, as well as companies restructuring their operations in response to the pandemic.
As longtime providers of FDA registered warehousing in Cleveland, we’re familiar with industry-wide efforts over the last decade to improve protections of temperature-controlled consumer products for packaging, processing and storage. Some measures have included onboarding better sensors, data logging and RFID devices. Not only does this help improve supply chain efficiency, it also helps reduce unnecessary losses and the potential for contamination.
Companies that make products requiring strict temperature controls and/or monitoring often outsource these responsibilities to 3PL warehousing companies for the benefit of operational costs, greater flexibility, improved efficiency and logistics expertise.
As a long-time 3PL firm and provider of Cleveland last-mile delivery services, we understand the important role logistics plays in getting products where they need to go – intact and on time. When logistics aren’t effectively coordinated, communication and visibility suffer and bottlenecks and delays become inevitable. This was illustrated recently in early efforts to distribute newly-available COVID-19 vaccines.
We should start by saying this was never going to be a perfect process because of the scale, limited supply, outsized demand and sheer number of stakeholders. But it was largely presumed the rollout wouldn’t be overly-taxing on U.S. transportation capacity. So why the many roadblocks? And what can businesses learn from it?
It’s possible supply chain inefficiencies in some states could be partially addressed with expanded trucking capacity. But complex storage, handling and administration requirements were an undeniable part of the equation. Beyond that though, it does seem the trouble broadly has been less in getting available vaccines from manufacturers to the states and more with logistical struggles in facilitating last-mile deliveries.
This is unsurprising because, as any 3PL service provider knows, last-mile deliveries are often the trickiest. This is true whether we’re talking about airplane parts or toilet paper or medicine. It didn’t help that this was essentially a massive, brand new supply chain with untested routes and logistics coordination.
The takeaway for businesses is that no matter what your industry, it’s imperative that your Cleveland last-mile delivery 3PL service be one with extensive experience, established routes, top-tier technology and trusted supply chain partners.
Dialing in business growth solutions in Northeast Ohio rarely involves a single factor, but the strength of a company’s Cleveland supply chain strategies can’t be overlooked.
Simply put, the supply chain is the flow of goods and services both within and among companies, domestically and internationally. It usually begins with raw materials and manufacturing, then onto production, processing and packaging and then transport and distribution – though your firm may only deal directly with one or two aspects. What is often not so simple – especially when that chain crosses state and international borders – is the logistics.
Ensuring goods get from Point A to Point B intact and on time is the foundation of our entire business model. Logistics management is a $1 trillion dollar industry in the U.S. – and it’s still growing, thanks to e-commerce and advancing technology.
Ohio University analysis shows that in just in the last decade, supply chain management employment has spiked by more than 50 percent – and that’s because business leaders increasingly recognize the upper hand it affords. The Cleveland and Columbus regions are especially active hubs, thanks to their central physical location, population and industry density and access to various transportation modes.
A recent analysis by commercial real estate and investment firm CBRE Group, Inc. revealed retail-to-warehouse conversions are soaring, in large part due to the way people shop. Big box stores are becoming less lucrative while e-commerce is booming. As this trend continues, Cleveland 3PL service providers at On Time Delivery & Warehouse urge companies to recognize there is a big difference between companies that solely provide public warehouse space and the extensive services you get with a third-party logistics firm.
The retail-to-warehouse place-trading involves a broad range of projects, including demolition of old malls and remodeling warehouse retail stores into distribution centers. CBRE also found that while demand for warehouse space overshot supply last year by nearly 30 million square feet. Industrial real estate availability fell to its lowest level since 2000, with only 7 percent up for grabs. Retail space, on the other hand, is much more prevalent. However, just because the space is there doesn’t mean it’s primed and move-in ready. Issues have included trouble with rezoning (which requires local government buy-in) and difficulty convincing other stakeholders like co-tenants to go along.
Companies in Cleveland looking to expand or outsource some of their warehousing services must understand that while public warehouse space-only services do offer some benefits, they’re far less than what you get teaming with Cleveland 3PL service providers.
Cleveland warehousing, distribution and fulfillment centers are grappling with a worsening labor shortage, some struggling to meet rising demands fueled in significant part by e-commerce. Nationally, it’s been a challenge that has businesses looking to launch or expand warehousing operations considering not just large consumer concentrations but an ample supply of qualified workers as well.
CBRE, a commercial real estate and research firm, released recent analysis revealing the need nationally for an additional 226,000 warehouse workers this year and the same in 2019. That’s a 25 percent spike in the five-year annual average. Low unemployment is complicating matters. A smaller labor pool is smaller means higher wages.
Companies shopping Cleveland warehousing options soon learn this is a dynamic but mature market. Often, costs are more manageable when they team with an established Northeast Ohio third-party logistics firm.