The Latest Benchmarking Costs, Prices, and Practices for North American Warehousing Available

Armstrong & Associates, Inc. (A&A) estimates the U.S. Warehousing Market at $173.4 billion with Commercial Warehousing Revenue (comprised of Value-Added Warehousing & Distribution (VAWD/3PL) and Public Warehousing Revenue) at $79.9 billion. By 2021, A&A expects the U.S. Warehousing Market will reach $179.2 billion and the Commercial Warehousing Market will reach $82.6 billion.

To track the most up-to-date costs, pricing, and practices in North American warehousing, A&A collected information from over 668 contract warehousing operations. The results are published in a report released today, “The Business of Warehousing in North America in the E-Commerce Era – 2021, Market Size, Major 3PLs, Benchmarking Costs, Prices and Practices.” The report is the latest in A&A’s series of Warehousing studies, which have been instrumental resources to the industry for over 15 years. In addition to market estimates, warehousing operators and customers of third-party logistics providers (3PLs) will find extensive guidelines for pricing, as well as A&A’s Top 50 North American VAWD 3PLs and Top 20 U.S. E-Commerce 3PLs lists, capability and technology benchmarks, contract length data, warehouse size and revenue, VAWD 3PL customers’ yearly contract value, in-depth analysis by commodities/industries and market rental and vacancy rates.

Top 50 North American VAWD 3PLs

A&A’s Top 50 North American VAWD 3PLs list—representing 3,821 facilities and 939.2 million square feet of warehousing space—includes data on leading 3PLs, including number of warehouses, total space, warehouse and value-added service capabilities, and warehouse management system (WMS) deployment. The Top 50 have an average of 71 warehouses. The average size is 311,081 square feet.

Top 20 U.S. E-Commerce 3PLs

When it comes to e‐commerce fulfillment in the U.S., it is Amazon and then the rest of the pack. Its e-commerce revenues are six times that of its next competitor UPS SCS. For an idea of Amazon’s scale, the revenue generated by the 3PLs listed after Amazon on A&A’s Top 20 U.S. E-Commerce 3PLs list, tallies to just under 53% of Amazon’s revenue.

E-Commerce

U.S. 3PL e‐commerce revenues reached $43.4 billion in 2019, and A&A expects a 28.0% CAGR through 2020 as e‐commerce purchases continue to expand during the pandemic and companies continue to outsource versus build internal fulfillment operations.

Benchmarking Costs and Prices
Operating margins, both expected and actual, have fallen since A&A’s previous studies. Market competition and customer sophistication are two driving forces. Pricing, especially in light of scope creep, is always a challenge. A&A’s Transactional Pricing Guidelines, included in the report, are guidelines for handling charges, storage per month by number of turns, rates for pallets high/deep, costs per square foot, racking costs, inventory turn discounts, per-hour labor rates, and transactional charges. Operating margin benchmarks are also provided.

This market size and benchmarking data is only available from A&A, and will be a valuable desktop reference. The complete report and other A&A research can be found at: https://www.3plogistics.com/product-category/guides-market-research-reports/market-research-reports/

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