The North American Warehousing market is rapidly changing. More private warehouses have been dominating the game while public warehousing only takes 40% of the commercial market. These different companies have been put on our Top 50 VAWD 3PLs list, which contains 3,827 facilities. The significant change for VAWD over the last two decades has been the functions of their software systems which provide managing inventories, labor, and utilities within the warehouses. This allows closer customer-manager relationships and promotes development of pricing and services.
As a company, we track the costs, pricing, and practices for over 500 contract warehouses. The results are published in our report, “First Wave Pick: The Business of Warehousing in North America – 2018, Market Size, Major 3PLs, Benchmarking Costs, Prices and Practices.” In terms of pricing, contract warehousing services are more tailored by location. Prices differ also with the size of the contract warehouse. The trend is for them to be larger in size. However, 59% of our sample within our latest report is smaller than 200,000 square feet.
Thirteen vertical industries/commodity classifications were used in analyzing the contract warehouses in our sample. Retail/Consumer Goods was the largest vertical accounting for 21% of all contract warehousing operations. Food/Beverage was second at 15%. High-tech/Computers was next at 14%. Refrigerated and Frozen warehouses comprised 9% of the total and of those, 10 handled frozen products. The average cooler cubic footage was 1.8 million. For frozen warehouse space, the average was 2.3 million cubic feet.
Within the report, we publish A&A’s Top 50 North American VAWD 3PLs by Warehousing Space within North America. The VAWD market, specifically within cold storage, has had some interesting M&A deals in 2019.
In February 2019, Lineage Logistics (with financial investors Bay Grove Capital, Stonepeak Partners, D1 Capital Partners, et. al.) announced that it would be acquiring rival Preferred Freezer Services for approximately $1 billion. At that time, Lineage Logistics was the 9th largest North American VAWD 3PL by Warehousing space within North America. Rival Preferred Freezer Services was ranked 23rd.
A few months later, Americold announced its own large deal. Private Equity Firm Blackstone sold Cloverleaf Cold Storage and its recently acquired Zero Mountain to Americold in a deal valued at $1.2 billion. Within our last warehousing report, Americold was the 5th largest North American VAWD 3PL by Warehousing Space within North America. By acquiring Cloverleaf and Zero Mountain, Americold expanded its footprint to remain competitive.
The research noted above is from the A&A warehousing report published in December 2018. To read the full report, visit: https://www.3plogistics.com/product/the-business-of-warehousing-in-north-america-2018-market-size-major-3pls-benchmarking-costs-prices-and-practices/
By Katelyn Dano
July 10, 2019