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FOR
IMMEDIATE RELEASE
U.S. Warehouse Market Size and Benchmark
Pricing Report Released
STOUGHTON, WI, January 10, 2005 – A
recently completed report on the United States warehousing market, complete
with price and profit benchmarks, has been released. "An Overview of
Warehousing in North America - Market Size, Major 3PLs, Benchmarking Prices
and Practices", estimates the U.S. commercial warehousing market at $25.7
billion. After-tax profitability was reported at 2.7%.
A major part of the report is dedicated to
warehouse price and practices benchmarks. Contract and public warehousing
are addressed in separate sections. Contract warehouse relationships are
measured by operating margins, EBITDA and EBIT. Regional differences are
reported for both contract and public operations.
Lengths of contracts reviewed in the study
were from 1-7 years. The study found that most contracts have 3 and 5 year
terms. Only 9% of contracts were for 1 year and 14% were for more than 5
years.
In the report, components of standard
warehouse pricing models are given. The major variables are space
utilization, labor, administrative costs and margins. This standard costing
methodology is used for both contract and public warehousing. Gain-sharing,
single-factor carton pricing and other key pricing elements are explained.
Public warehousing pallet handling charges were found to vary regionally
from $4.70 to $5.86. Package handling, storage and value-added service
charges are detailed in the report.
Expected operating margins and
profitability measures are compared to actual results for 3PLs in the study.
These relationships are reviewed in detail and in reference to the
“Negotiation Zone.” Statistical analyses were performed showing the effects
on profitability of open book relationships and leasing versus ownership.
“We undertook this study because we had a
Japanese consulting client who wanted to know what and how 3PLs and
commercial warehouses were charging for their services in the U.S.,” said
Richard Armstrong, president of Armstrong & Associates, a supply chain
management consultancy. “There was not a good source available and the only
way to get the information was to put out an RFP. Our report is the only
public explanation of what the real prices are in warehousing in North
America.”
The analysis emphasizes the growth of
contract warehousing at the expense of public warehousing. The results
indicate however, that profitability is not inherent in either of the models
but owes more to company cultures and practices.
The complete study with appendices is
available from Armstrong & Associates. It can be purchased over the
phone or online at:
http://www.3plogistics.com/shopsite/index.html.
About Armstrong & Associates:
Armstrong & Associates, Inc. is a supply
chain management consulting firm specializing in market research, mergers
and acquisitions and logistics outsourcing. Armstrong & Associates publishes
Who’s Who In Logistics?. Recent research papers include: "Warehousing
in the United States" and "Global Logistics Services Providers II". In
addition, Armstrong & Associates maintains databases of warehousing
companies, freight forwarders, third-party logistics providers, and
distributors.
For more information, contact: Richard
Armstrong (800) 525-3915 or e-mail Dick@3PLogistics.com.
Source:
Armstrong & Associates, Inc.
100
Business Park Circle
Suite 202 Stoughton, WI 53589
Phone: (608) 873-8929
Fax: (608) 873-5509
Website:
www.3PLogistics.com |
