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FOR
IMMEDIATE RELEASE
Warehousing in North America - 2006
STOUGHTON, WI, May 22, 2006 – A major white
paper on warehousing has just been released. The report, “Warehousing in
North America – 2006,” benchmarks prices and practices. In addition it
includes basic industry statistics and major player information.
The author reports that U.S. commercial
warehousing revenues are $28.8 billion. “The industry grew 9.5% last year
and we forecast another strong year for 2006,” said Richard Armstrong,
author of the report.
The report benchmarks contract and public
warehousing in separate sections. Contract warehouse relationships are
measured by operating margins, EBITDA and EBIT margins. Regional differences
are reported for both contract and public operations. Key performance
indicators (KPIs) and value-added services frequencies are included.
Lengths of contracts reviewed in the study
were from 1-7 years. The study found that most contracts have 3 and 5 year
terms.
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 $5.75 to $6.79. 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 originally 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
Armstrong. “There was not a good source available. 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 by phone at
+1-608-873-8929, 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: "Is Bigger Better? Third-Party Logistics Financial and
Acquisition Results for 2005,” and “Trends in 3PL/Customer Relationships.”
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
Armstrong@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
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