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FOR IMMEDIATE RELEASE

Warehousing in North America - 2007

STOUGHTON, WI, May 21 2007 – Commercial warehousing in the United States has reached nearly $33 billion according to a new report by Armstrong & Associates.  The number of commercial warehouses is estimated at 7,900 with 1.25 billion square feet of space.  Growth was 9.7% for 2006.

 

The report contains detailed information of the contract and public warehousing markets.  Operating margins, EBITDA and EBIT distributions are given for contract warehousing operations.  Three year contracts are standard covering 54% of the market.  Comparisons for open book versus closed book and building ownership/leasing situations have been calculated.  Summaries for KPIs, value-added services and gainsharing are presented.

 

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.  Gainsharing, 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.

 

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: "Concentration - Third-Party Logistics Financial and Acquisition Results for 2006,” 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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Copyright © 2008 Armstrong & Associates, Inc.

Last modified: 05/14/08