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:

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


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