Short-term on-demand warehousing and how it can support supply chains

The impact of COVID-19 on supply chains

Before the pandemic, the just-in-time (JIT) supply chain model, which minimizes inventory to lower costs, was the norm. However, this model exposed the vulnerabilities of businesses as COVID-19 accelerated change in every vertical sector of the supply chain, particularly warehousing.

The shift to remote working and the exponential rise of e-commerce have exposed supply chains to overwhelming demands and major disruption. Companies weren’t sure if their warehouses were going to be empty week to week, or if they were going to be overloaded. The additional industrial space that is not being used is a huge financial strain on a business, but on the other hand, purchasing habits were so volatile during the pandemic that the overflow has also become a financial concern.

With changes in consumer preferences, supply chain setbacks, project delays and more due to the pandemic, there has never been more need for regional space that can be leased to individuals. flexible terms. Due to the nature and uncertainty of the economy, many businesses don’t want to commit to a long-term sublease of space, but at the end of the day, they still need a solution. . Renters and landlords also want the opportunity to generate income if they have unused space by simply racking up their expenses. Short-term, on-demand warehousing has enabled businesses of all sizes and in all industries to make smart warehouse space decisions and more effectively plan for the future during COVID-19.

The rise in popularity of short-term storage

The supply chain industry naturally doesn’t want to fix what isn’t broken. However, when the COVID crisis hit, many traditional processes and workflows began to fail. This has accelerated the need for more innovative solutions and new technology-based services like Chunker have become a common necessity.

Warehouse leasing has long been based on long-term commitments and needs. For example, a business would have to commit to a 10-year lease, which involved forecasting and planning for space requirements over a decade. This left a ton of room for error, especially since consumer behavior has evolved so rapidly.

Short-term and on-demand warehousing supports supply chains in the new era by adding agility and flexibility. Companies no longer need to sign a five-year lease when they only have a five-month problem to solve. By enabling short-term transactions, flexible warehousing allows a business to respond more quickly.

In addition, companies are able to take advantage of new opportunities and access new markets more quickly. Typically, it takes six months to a year to stock up and secure long-term storage space. With short-term and on-demand storage options, a business can now find industrial space within 24 hours and enter a new market, while planning for the long term. This allows for better testing of the market, while eliminating some of the risks associated with entering a new market.

Looking Ahead: What’s Next in Warehouse Space and Supply Chains

Where we’ll see short-term on-demand warehousing proliferate is in areas such as construction, 5G deployments, hotel renovations, and overflow storage for retail and e-commerce. For example, construction projects require trucks of goods to be brought to the site, which requires short-term space for storage of materials. Flexible warehousing will become increasingly vital for supply chain resilience in the future and is less expensive than traditional brick and mortar.

Short-term and on-demand warehouses are the next natural step in the evolution of commercial real estate and industrial space in particular. Over the past few years, we’ve seen the space evolve and adapt to new market entrants like on-demand office space, short-term rentals, co-living, pop-up shops and more. As the industry continues to evolve and adapt to more on-demand solutions, it will continue to be a go-to resource for people looking for the convenience, simplicity and efficiency of finding and renting warehouse spaces in the post-pandemic era.

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Brad Wright is the CEO of Chunker

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