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The “Uberization” of Warehousing

Dynamic warehousing involves buying warehousing services on a pay-per-use basis. Just as with Uber and AirBnB, exemplars of today’s “on-demand” economy, users and providers meet and transact with each other via an electronic marketplace.

By ·

No doubt many of this journal’s readers already tap their mobile phones to get an Uber to the airport. Or they use the Airbnb app to find a nice place to stay for that long weekend. So it shouldn’t be a big surprise for them to learn that warehouse services can now be acquired in similar ways.

Dynamic warehousing is emerging as a viable way of purchasing warehousing services on demand—paying only for what is used instead of owning distribution centers or signing contracts with third-party logistics providers (3PLs).* As with Uber, Airbnb and a host of other shared-economy services, the actual pay-per-use transactions occur in an electronic marketplace. The approach can extend to a company’s entire warehousing strategy, or it may supplement an existing logistics network built on long-term contracts. In either case, it allows the company to adapt quickly to variable demand and cost conditions.

Dynamic warehousing can be particularly useful for e-commerce, where retailers typically face high demand uncertainty and often have significant capital constraints. Additionally, dynamic warehousing allows e-commerce retailers to rent small units of capacity in many parts of the country, enabling quick delivery to wider pools of customers.

This article introduces the idea and demonstrates its value with a brief case study.

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Click on Log In Now at the top of this article for full access.
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By ·
Download Article PDF

No doubt many of this journal’s readers already tap their mobile phones to get an Uber to the airport. Or they use the Airbnb app to find a nice place to stay for that long weekend. So it shouldn’t be a big surprise for them to learn that warehouse services can now be acquired in similar ways.

Dynamic warehousing is emerging as a viable way of purchasing warehousing services on demand—paying only for what is used instead of owning distribution centers or signing contracts with third-party logistics providers (3PLs).* As with Uber, Airbnb and a host of other shared-economy services, the actual pay-per-use transactions occur in an electronic marketplace. The approach can extend to a company’s entire warehousing strategy, or it may supplement an existing logistics network built on long-term contracts. In either case, it allows the company to adapt quickly to variable demand and cost conditions.

Dynamic warehousing can be particularly useful for e-commerce, where retailers typically face high demand uncertainty and often have significant capital constraints. Additionally, dynamic warehousing allows e-commerce retailers to rent small units of capacity in many parts of the country, enabling quick delivery to wider pools of customers.

This article introduces the idea and demonstrates its value with a brief case study.

SUBSCRIBERS: Click here to download PDF of the full article.

 


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From the December 2017
This is a comprehensive guide to services, products and educational opportunities targeted specifically to supply chain professionals. As with years past, we’re also featuring several articles we trust will offer food for thought in your supply chain throughout the coming year.
Transportation Trends: The last mile, history repeating
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