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FOR
IMMEDIATE RELEASE
Armstrong & Associates, Inc. 100 Business
Park Circle, Suite 202 Stoughton, WI 53589 (800) 525-3915
Warehouse Pricing Study
Establishes Benchmarks for U.S.
STOUGHTON, WI – A recently completed study
of 3PL warehouse prices has for the first time established benchmarks for
the United States. The study covers both contract and public warehousing.
Regional price differences are reported.
Major metropolitan area prices are reported for principal U.S. logistics
locations. The report tracks profitability by region in terms of operating
margins, EBITDA and EBIT.
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.
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 vs. 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 first
public explanation of what the real prices are in warehousing.”
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.
About Armstrong & Associates: Armstrong &
Associates, Inc. is a supply chain management consulting firm specializing
in market research, mergers and acquisitions and 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 warehousemen,
freight forwarders and third-party logistics and distributing companies.
For more information, contact: Richard
Armstrong (800) 525-3915 or email 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
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