2025 Warehouse/DC Operations Survey: Tech adoption marches on

From the November 2025 edition of Supply Chain Management Review.

November 2025

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Companies operating warehouses, DCs, and fulfillment centers continue to face significant challenges, from inventory shifts and labor constraints to supporting growing e-commerce volumes, according to our 2025 Warehouse Operations & Trends Survey—the 20th edition of this benchmark report.

In response, operators are adapting their networks and investing in automation. Even amid uncertainties, DC operators are upgrading systems and reconfiguring networks to better meet customer demands and accommodate expanding channels, reflecting a continued commitment to operational improvement.

Some of the highlights of the survey include the following.

• Projected CapEx budgets rose from an average of $1.8 million last year, to just over $2.1 million this year. This indicates companies are forging ahead with improvements.

 • Reliance on paper-based picking decreased to 40% response, down from 44% last year. Use of voice picking and pick-to-light applications increased.

• Inventory challenges persist. SKU counts were up, inventory turns decreased, and receiving was named as the most congested area of the warehouse.

The survey, conducted annually by Peerless Research Group (PRG) on behalf of Logistics Management and sister publication Modern Materials Handling, asks about operational factors at DCs, such as the size of the network, number of employees, average annual inventory turns, use of temporary labor, channel trends, metrics used, and how warehouse data is captured. It also asks about use of information technology (IT), warehouse automation, and equipment-like lift trucks.

 

This year, the survey drew 101 qualified responses from professionals in logistics and warehouse operations across multiple verticals. The survey was in the field during the month of August 2025. The average company size among respondents held steady, with the average annual revenue size being $753 million, versus $774 million last year.

Overall, there are plenty of positives in the survey, such as continued growth in CapEx budgets, though there are areas of concern as well, explains Norm Saenz, a partner and distribution director with St. Onge Company, a supply chain consulting firm and our partner in this survey for the past 20 years.

“The biggest takeaways are the increase in capital spend moving into 2026, e-commerce growth in 2025, and the fact that labor remains a concern for operators,” says Saenz. He adds that the investment momentum is reflected this year by findings such as the increase in best-of-breed warehouse management systems (WMS) and other technologies to enhance the productivity of the picking operations.

“I believe we can expect that in 2026, there will be increased investments, as companies optimize their networks, grow their e-com business, and revamp operations to be more efficient with the use of automation and technologies,” says Saenz.

 

Operational characteristics

On the inbound side for 2025, 9% handle full pallet only, compared to 23% last year, while 20% deal with full pallet and case, down from 23% last year. This year, 51% receive a mix of full pallet, case and split case inbound (48% last year), while 20% deal with case and split case, up sharply from 6% last year.

On the outbound side, 11% ship full pallet only, down from 17% in 2024, while 15% ship full pallet and full case outbound, down from 11% last year. Meanwhile, 47% said they ship a mix of full pallet, case, and split case, up from 35% last year. Case and split case outbound dropped to 18% for 2025, from 31% last year, while 9% do split case only outbound, up 3%.

The average number of employees in the main DC came in at 143 this year, down from 146 people last year. While 40% put that count at 25 staff or less for the main DC, 11% have more than 200, and 16% have more than 100 employees in their largest DC.

 

 In terms of the number of buildings in the network, 42% this year have just one, same as last year. This year, 16% have two buildings (21% did last year), 5% have three DCs (14% did last year), while 37% have more than three buildings, up from last year, when it was 23%.

When we asked about the most common square footage (sq. ft.) in the network, the average was 222,620 sq. ft., up from 198,558 sq. ft. last year. The bigger sq. ft. the network, the bigger that average, with those with three or fewer buildings, having an average of 205,500 sq. ft. in 2025, and for those with four-plus DCs, 788,350 sq. ft. is the average this year.

 

We annually ask about the most common DC clear height in the network. This year, the average was 31.8 feet, up from 29.6 feet last year, but just a tad over the 31.3 feet average two years ago. This year, 9% said the average was 50 feet or higher, the largest percentage for that choice in the past four years.

The “most congested” area of the warehouse this year was the receiving docks, with a 38% response, up from 20% last year, when storage was the most congested area. This year, 16% selected picking as the most congested area or process, up by 6% the previous year.

E-commerce marches on

Wholesale regained its spot as the most frequently cited channel serviced by respondents, at 51%, up from 43% last year. Retail channels are supported by 49% of respondents this year, up from 47% last year.

The channel with the biggest gain this year, however, was e-commerce, with 44% supporting e-commerce fulfillment, up from 25% last year. Also on the rise was micro-fulfillment at retail sites for customer pick up, which reached 22% this year, up from 9% last year.

 

When we asked how channels are fulfilled, self-distributed from one main DC came in at 30% this year, down from 51% last year, but it remains the most frequently cited method. Using a third-party logistics (3PL) partner for all channels increased to 16% this year, from 9% last year, and there was also growth in using a 3PL for e-commerce, but self-distributed for other channels (9% in 2025, versus 4% in 2024).

We ask respondents to describe e-commerce growth by choosing from ranges in increments of 10 percentage points. The most frequently cited choice for 2025, at 41%, remains less than 10% growth, however, there were increases respondents citing ecommerce growth 30% to 39% (11% chose this range, up from 8% last year) and 7% cited 40% to 49% growth, up from 4% last year.

When asked if operations were expanding operations in terms of factors like SKUs or labor over the next 12 months, a net of 80% plan to expand in some way, which is down from 84% last year. However, a couple of areas did see a percentage increase, with 25% saying they would add employees, up from 14% last year, and 33% plan to add square footage, up 25% last year.

CapEx & tech upswings

The average projected CapEx budget for 2024 reached $2.16 million among this year’s respondents, up from $1.8 million last year, and $1.15 million two years previous.

The median this year was $425,000, up from $375,000 in 2024. While 36% said their estimated budget would be less than $250,000, 7% have a budget topping $10 million, and a combined 26% have budgets ranging from $1 million to $9.99 million.

Some of those budgets will likely go to technology, software, and automation, which again showed signs of increasing.

Use of best of breed WMS reached 23% this year, up from 13% last year. While those saying they use some type of WMS declined slightly, from 93% in 2024 to 87% this year, that’s still higher than the 84% from two years previous. Use of on-demand or cloud WMS bumped up from 4% in 2024, to 13% this year. Additionally, there were slightly higher percentages in those saying they use goods-to-person systems and shuttles.

All this software use may explain the continuing decline of paper-based picking methods. This year, only 40% said they use some paper-based picking methods, down from 44% last year, and 56% back in 2023. There was also growth in methods including pick to light, and voice.

When we asked about materials handling systems in use, well established categories such as forklifts and push carts remain the top choices; but this year, 13% said they use autonomous forklifts, 18% cited use of autonomous mobile robots (AMRs) or automated guided vehicles (AGVs), and 18% use shuttles or automated storage & retrieval systems.

Single order picking remained the most cited order filling technique at 65%, while batch picking was cited by 48%, up from 44% last year, and use of put walls reach 10%, up from 5 last year. Use of cross-docking also grew, from 14% last year, to 28% this year.

With WMS used by 87% this year, it’s surprising that use of manual data collection to gauge productivity increased this year to 51%, from 40% last year, and that automated data collection was used by 49% this year, down from 56%. However, that 51% of respondents doing some manual data collection is the same as it was two years ago—and lower than it was three years ago.

We ask about productivity metrics in use annually, and this year, a net 81% are using some type of metric, down from 86% a year ago. Metrics on the rise this year include units/pieces per hour, lines per hour, and orders per hour.

For broader ranging metrics on DC management, a net of 92% report they use metrics of some type to manage DCs. Types of metrics on the upswing this year include inventory accuracy (76%, up from 70%), order or line fill rate (named by 46% this year, up from 35%) and productivity rates, which edged up 3% to reach 43%. Use of on-time shipping metrics, cited by 63% last year, fell to 49% this year.

 

Inventory & storage

One sign that inventory management poses a big challenge this year, especially during peak season, is that a cumulative 39% of respondents said that during peak, space utilization is 85% or higher. Of these, 20% have a utilization level during peak of 95% or higher. The average percentage of space used during peak came to 75% this year, up from 73.2% last year.

Additionally, when we asked if they leased some space during peak, 44% said they did a few times this year, up from 44% last year.

This year, the average annual inventory turn figure came it at 6.3 turns for 2025, down from 6.5 turns in 2024, and 8.2 turns back in 2023. Meanwhile, when it comes to the number of SKUs, the average reach is 9,565 SKUs, up from 7,790 last year, and also higher than the 8,494 SKU average back in 2023.

In terms of having 100% accurate SKU weights and dimensions in the inventory item master, 57% said “yes” they do this year, down from 60% last year.

Saenz notes that inventory management remains a top priority for DC operators and is most effective when supported by automated data capture. This allows managers to know not only what inventory is on hand, but also the movement and velocity of items—enabling more accurate decisions to optimize inventory turns.

“Turns aren’t where they were two years ago with this survey, but they’re not much different than reported last year,” says Saenz. “Still, continuing issues with lower turns can have multiple causes, such as adding too much inventory for existing items, or adding new items that aren’t selling at the expected velocity.”

According to Saenz, another possibility is poor inventory management from using low levels of technology and software. “The survey shows inventory accuracy as a top metric, yet many respondents are manually capturing data to generate metrics,” he adds.

Other challenges

When we asked what percentage of the workforce are temps during peak season, the average this year was 16.6% this year, up from 11.4% last year. A combined 5% said that during peak periods, 30% or more of the workforce is temporary.

To find temp labor, 56% use staffing agencies; 39% use temp agencies; 27% use contract firms; 22% said they make use of on-call workers; and GIG worker platforms are used by 10%.

On our question about annualized employee turnover rate, this year, 55% said it was 15% or less; while 29% deal with a turnover rate of between 16% to 30%.

In terms of labor retention methods (multiple answers permitted), the leading practice this year was cross training, cited 38% this year (up from 31% last year); followed by increase in base pay, cited by 18%, incentive pay, named by 16%; and a bonus or recognition program of some type, used by 14% this year. This year, 8% named upskilling to operate automation, up by 2% versus last year.

DC networks, in addition to filling customer orders in different units or quantities, also need to excel at various value-added services (VAS). The top four VAS categories cited this year are special labelling (43%), special packaging (35%), kitting (32%), and serial number control.

Each year the survey also asks if the supply chain operation has experienced a catastrophic event of some type (including extreme weather like hurricanes, as well as events like strikes, hackers, or supplier failures) in the past two years. This year, 92% said they had not experienced a major disruptive event, down from 87% last year.

 

Saenz observes that managing DCs is more complex than ever, which is why it’s encouraging to see growth in CapEx, as well as high or growing adoption levels for software, advanced picking systems, and generally, more robotics and automation.

 

However, Saenz adds that moving toward automated generation of metrics is an area where operations can improve, helping DCs better address perennial pain points such as inventory inaccuracies or lower-than-expected productivity rates.

“Over-reliance on manual collection of data negatively affects the ability to calculate, track, and report on key performance indicators,” says Saenz. “That said, there were multiple positive findings in this year’s survey, from the addition of more automation, to more use of cross training, which helps increase the utilization of staffing during peak volume periods.”

 

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