Warehousing in North America – 2008

STOUGHTON, WI, May 30, 2008 – Commercial warehousing in the United States has reached $37.5 billion according to a new report by Armstrong & Associates, Inc. The number of commercial warehouses is estimated at 8,000 with 1.3 billion square feet of space. Market growth was 7.7% for 2007 and commercial warehousing now constitutes one-third of total U.S. warehousing.

The report contains detailed information of the contract and public segments of the commercial warehousing market. Lists of the top dry and refrigerated warehousing providers with overall storage capacities are provided. Operating margins, EBITDA and EBIT margin distributions are provided for contract warehousing operations. Three year contracts are standard covering 54% of the contract warehousing market. Comparisons for open book versus closed book and building ownership/leasing arrangements have been calculated. Specifics for KPIs, value-added services and gainsharing are presented. This year’s report has expanded coverage on the Canadian warehousing market.

In the report, components of standard warehouse pricing models are given. The major variables are space utilization, labor, administrative costs and target profitability margins. This standard costing methodology is used for both contract and public warehousing pricing. 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 the warehousing providers participating in the study. These relationships are reviewed in detail and in reference to the warehouse pricing “Negotiation Zone.” Statistical analyses detail the effects of open book relationships and leasing versus ownership on overall warehouse profitability.

The analysis explores the trend in 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:

About Armstrong & Associates, Inc.: Armstrong & Associates, Inc. is a supply chain market research and consulting firm specializing in 3PL market research, provider benchmarking, strategic planning, mergers and acquisitions, logistics outsourcing, centralized transportation management programs, and supply chain systems evaluation and selection. Armstrong & Associates publishes Who’s Who in North American Logistics and Supply Chain Management and Who’s Who in International Logistics and Supply Chain Management. Recent research papers include Hanging Tough – U.S. and Global Third-Party Logistics Market Financial and Acquisition Results for 2007 and Projections to 2010 and Trends in 3PL/Customer Relationships.

For more information, contact: Richard Armstrong +1-800-525-3915 or email

Source: Armstrong & Associates, Inc.
100 Business Park Circle, Suite 202
Stoughton, WI 53589 USA
Phone: +1-608-873-8929
Fax: +1-608-873-5509