Warehouse Space Shortages
The Latest Supply Chain Issue: A Lack of Warehouse Space
The logistics situation in the United States continues to face serious challenges. With ships floating offshore in major ports, a backlog of goods waiting to be transported, container shortages, and increased charges for domestic transport, it’s difficult for many businesses to acquire the supplies they need. As a result, packaging material supply lines have become disrupted, and costs of these items have increased.
Warehouse space is the newest issue
Another challenge we are facing is a shortage of warehouse space. During Q3 in 2021 there was a supply deficiency of 41 million square feet of warehouse space, compared to demand for space during the same quarter. In Southern California, warehouses are seeing vacancies as low as 1% or even less.
The reasons for the shortage are similar to the reasons for the supply chain issues overall: a lack of labor to move goods and a surge in demand for products. According to Bloomberg, for every $1 billion increase in online sales, an additional 1 million square feet of warehouse space is required. With consumer demand surging and businesses stocking up on supplies, storage networks in the U.S. are being pushed to their limits, and new construction is struggling to keep up.
What the warehouse space shortage means for packaging supplies
With future supplies uncertain, many businesses have been purchasing large quantities of the packaging materials they need to operate. However, this hedge against future shortages is exacerbating the shortage of warehouse space and causing prices to skyrocket even more. Companies are once again uncertain about the best path moving forward. They can either purchase large quantities of the materials they need and pay a premium for storing them, or they can delay stocking up and risk not having the supplies they require in the months ahead.
At Pioneer, we’re offering an alternative option through our third party logistics (3PL) services.
We’ll store your packaging supplies for you
Our 3PL nationwide distribution network is one solution Pioneer offers to help our customers overcome the challenge of storing their packaging materials. We provide complete supply chain solutions, specializing in transportation, logistics, air and ocean forwarding, and warehousing services. Pioneer and our partners will store your packaging supplies and materials until you need them, so you don’t have to purchase in bulk and pay to store them.
With over 60 3PL warehouse locations in 20 metro areas throughout the United States, our 3PL network is extensive. Your team will have access to our full lineup of packaging materials wherever your facilities are. Our Nationwide Packaging Pick Up Program is available 24 hours a day. All you have to do is let us know what you need beforehand, and we’ll have it ready when you arrive to pick it up.
How to move forward
The current supply and warehouse situations are difficult, and it’s unclear how long these issues will persist. The best we can all do is use the tools at our disposal to move forward and work through the current situation. At Pioneer, we’re working hard to develop new solutions continually for our customers’ packaging needs, and our 3PL network is one example of that effort.