Storage demand fluctuations are nothing new to the Ohio warehousing industry, though this year has certainly tested the limits. Demand for nonessential goods and same-day deliveries swung wildly throughout 2020, in part reflecting a sharp rise in e-commerce, something Northeast Ohio warehousing operations felt acutely.
Our hats are off to our various supply chain partners and warehouse workers who quickly adapted to the strict requirements and regulations of numerous new industry priorities driven by consumer needs. With distribution bottlenecked at several points during various times, our warehouse employees adroitly rose to the challenge, – particularly when it came to compressed sales cycles of goods that had to be swiftly and carefully offloaded from ports and trucks and properly consolidated, sorted, packaged, stored and transloaded.
The U.S. Census Bureau reports e-commerce activity spiked dramatically in the second quarter of this year as many consumers shifted their shopping practices away from physical stores and over to digital platforms. Demand for dipped, while the home improvement and technology sectors boomed. U.S. retail e-commerce increased 44.5 percent year-over-year, ultimately resulting in 2.4 million additional square feet of warehousing space, many of those dedicated to business-to-business (B2B) operations.
“Resilient supply chain” is not a new catchphrase in the logistics world. It is, however, one that has taken on new importance in the midst of the COVID-19 pandemic. Cleveland trucking services like ours recognize that streamlined transportation is essential to resiliency. Delivering goods as promised is pivotal for businesses involved in goods production and transportation.
It’s always been important to our team at On Time Delivery & Warehouse to avoid unwanted disruptions, bottlenecks and delays, whether we’re handling imported/exported freight or carrying out same-day deliveries.
In this current climate, we know that building customer confidence is critical. Now more than ever, business reputations are riding on the service and quality standards of their transportation and logistics firms.
We know our clients have many Cleveland trucking services to choose from. But none stay in this business long if they aren’t offering clients invaluable services and flexibility. On Time Delivery & Warehouse offers a one-stop-shop for streamlining supply chains: Warehousing and distribution, shipping, trucking, transportation and third-party logistics.
Before a global pandemic threw so many supply chains completely off-course, flexible Cleveland warehousing was an emerging trend driven by growing consumer demand for same-day and next-day deliveries. Now, flexible warehousing options are especially attractive for retailers balancing their fluctuating needs for warehouse space and demands to efficiently move inventory on-the-fly.
Flexible warehousing (also sometimes called in-demand warehousing, pop-up distribution, public warehousing or multi-client space) is a service that connects warehouse operators with businesses requiring storage on an as-needed basis. This allows suppliers to pay seasonally or as-they-go rather than be tied to a year-round contract. Many client products can be received, handled, stored and shipped out in a flexible environment, as opposed to dedicating a large space and full labor force to a single operator. Manufacturers and retailers want to position themselves closer to customers without getting locked into multiyear leases or long contracts – particularly when trade conditions and buying patterns are so uncertain right now.
But companies that only offer flexible Cleveland warehousing may fall short of what you need, especially if your bread and butter is specialized goods. Third-party logistics firms can commit a dependable workforce to store, handle and deliver sensitive goods. On Time Delivery and Warehouse stands out among our competitors because we offer both.
Warehousing has proven more critical than ever during the COVID-19 pandemic, with teams like ours responsible for delivering essential goods to healthcare facilities, businesses and individuals. While many other businesses are closed or have the bulk of their employees working from home, warehouses like ours have gone into overdrive. Keeping the supply chain moving is important, but it’s also imperative that we keep our Cleveland warehousing workers safe.
On Time Delivery & Warehouse has taken numerous measures to assure our warehouse facility personnel can do their jobs safely and that we’ve minimized the risk of infection. We’ve adopted a range of actions from implementing strict social distancing guidelines to taking worker temperatures to ensuring our facilities are frequently cleaned and sanitized. Meal breaks and shifts may be staggered. Meetings are held over the phone or via video conferencing where possible.
Keeping our valued warehouse workers healthy our top priority, and it also helps protect our customers and ensures we can meet their dynamic and rising needs.
Cleveland warehouse kitting services offer many competitive advantages to manufacturers and retailers hoping to streamline their processes and lower costs.
Warehouse kitting, a service typically handled by a 3PL, involves taking multiple stock keeping units (or SKUs) and combining them into a single package to create a separate SKU. In other words, we’re taking several individual products or parts of individual products and compiling them into “kits.” Those kits are then passed on for production and “just-in-time” deliveries.
Many companies take advantage of 3PL warehouse kitting because it allows for:
- Reduction in the number of purchase orders;
- Lowered administration costs;
- Faster assembly (for manufacturers and/or consumers);
- Optimized use of space;
- Better packaging quality;
- Fewer shipping mistakes;
- Happier customers.
Efficiency in Cleveland warehousing is essential for a company to thrive. This is especially true when inventory is one of a business’s largest assets – and biggest expenses. But warehousing is a huge undertaking, which is why so many firms outsource this crucial function to third-party logistics teams that specialize in it.
Third-party logistics companies, or 3PLs, work in varying capacities to manage your supply chain. Warehousing is a critical cog in the supply chain wheelhouse, key to the protection, packaging and delivery of your goods from the front end of production to the final consumer destination.
There can be benefit in managing in-house warehousing, but it should be understood it’s a challenging specialty enterprise all its own.
Ballooning e-commerce in nearly every industry has rendered Cleveland warehouse space in short supply. Faced with increasing consumer demands and fewer options, more Northeast Ohio businesses are opting to outsource Cleveland warehousing and distribution operations rather than keep them in-house.
Companies with seasonal, fluctuating or uncertain profit margins or those planning on a substantial expansion or contraction generally conclude it makes little sense to keep these resource-heavy duties in-house when those who outsource Cleveland warehousing to a third-party logistics firm are gleaning more benefits with less cost/hassle. Those who manage their own warehousing will be dealing with increasingly stiff competition from those who outsource. In addition to fewer choices and soaring e-commerce, there are sky-high transportation expenses, evolving technology and expanding federal regulations.
Ohio’s Warehousing Market Primed for Growth
Ohio is within one day’s drive of half the U.S. population, making it an attractive site not just for many national/international buyers, but by manufacturers but distributors and workers. Some businesses prefer greater control of day-to-day warehousing and are reticent to invite a “middleman” into the mix. But when you outsource Cleveland warehousing and order fulfillment to a first-rate third-party logistics firm, you can devote more valuable resources on things like product development and innovation, sales, marketing and customer service.
If you need more proof of the benefits of third-party warehousing, take a look at Penn State researchers’ data in 21st Annual Logistics Study in 2017 revealing the number of Fortune 500 companies using third-party logistics doubled from 46 percent to 90 percent in 15 years. Small businesses too can carve out a significant advantage when they outsource Cleveland warehousing, particularly when sales are inconsistent throughout the year.
How to Know It’s Time to Outsource Cleveland Warehousing
Even the best products won’t move if they’re routinely delivered late, damaged or not at all. A client may forgive you once, maybe even twice, but you aren’t likely to get another crack at it beyond that – and your competitors will be ready to seize that opportunity.
In deciding whether to outsource Cleveland warehousing, Northeast Ohio businesses should analyze the totality of their resources and capacity. Sometimes even if it can be handled in-house doesn’t mean it should be. Warehousing and distribution is a constant and at times delicate balancing act that involves more than merely securing space. You need qualified managers to oversee it and reliable workers to keep goods moving smoothly. As distribution centers multiply in Northeast Ohio, skilled warehousing workers are becoming just as tough to find as space. It won’t save you money in the long-run if you have to cut corners on quality, service or safety when times are lean.
High-quality logistics facilities cropping up all over the place in big markets like Atlanta, Dallas and Chicago. But even secondary markets like Cleveland, Nashville and Louisville are growing at a rapid clip too. 3PL services reportedly account for 61 of the 100 largest warehousing and industrial space deals in 2018, according to commercial real estate brokerage CBRE. Industry insiders don’t expect a slowdown.
Companies that want to keep operational costs in check may consider scrapping warehousing altogether, particularly considering the speed of modern shipping methods (goods aren’t going to remain on warehouse shelves for long, if at all). However, warehousing is still a hugely important link in the business supply chain.
When you outsource Cleveland warehousing functions, you have a better shot of bolstering profit margins because you’re more likely to be able to take advantage of:
- A centralized location(s);
- Better service with experienced warehousing and transportation workers;
- Value-added delivery;
- Flexibility for scaled or seasonal growth.
If you are considering changing up your Cleveland warehousing strategy, On Time Delivery & Warehousing, Inc. can help you map a plan that makes the most sense for your unique business model – and help you make adjustments as necessary.
If you have questions about outsourcing Cleveland warehousing and distribution 3PL partnerships, contact On Time Delivery & Warehouse by calling (440) 826-4630 or sending us an email.
On-Demand Warehouse Space Gains Traction in Tight Real-Estate Market, Dec. 23, 2018, By Jennifer Smith, The Wall Street Journal
Midwest Facing A Skilled-Worker Shortage As Warehousing Boom Continues, July 18, 2018, By Jess Mador, All Things Considered, NPR
Ecommerce, 3PLs Account for 61% of Major Warehouse Deals in 2018, Feb. 25, 2019, By Mike O’Brien, MultiChannelMerchant.com
More Blog Entries:
Public Warehouse v. 3PL Service Providers: What’s the Difference? Feb. 25, 2019, Cleveland Warehousing 3PL Blog
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.
Warehousing is essential in Ohio logistics operations, where the goal is faster, cost-effective facilitation of your supply chain. The best warehouse management systems help companies keep pace with seesawing compliance regulations, increasing order cycle demands and oscillating supply chain requirements.
It’s no shock the global market for warehouse management systems is expected to climb from $1.7 billion this year to $5.72 billion in 2025, according to Grand View Research. Clearly, a growing number of industries recognize the value of third-party warehousing.
At On Time Delivery and Warehouse, we know that when warehouse operations are smooth, you get better results with:
- Proper inventory accounting;
- Order fulfillment accuracy;
- Fewer picking errors;
- Practicable stock replenishment;
- Ease of scalability;
- Real-time tracking and trouble-shooting.
Partnering with a trusted Ohio logistics firm allows for all this, plus shared costs.