With warehousing properties and warehousing space in short supply due to a boom in e-commerce, flexible warehousing has gained a new relevance all over the country, but especially in California. Keep reading to learn more about this trend.
What Is Flexible Warehousing?
Flexible warehousing refers to an arrangement where companies pay a warehousing provider only for the space they need to store their inventory. This way, several companies use different sections of the same warehouse without having to buy or rent a warehousing property themselves.
Also referred to as on-demand warehousing, flexible warehousing allows organizations to scale their logistic capabilities timely and efficiently in order to meet the demands of their customer base.
Some of the benefits of flexible warehousing include:
- Capital savings
- Reduced shipping time
- Savings on labor costs
- Improved management of seasonal fluctuations
Why Is Flexible Warehousing Important?
The rising interest in flexible warehousing goes hand in hand with the supply chain disruptions caused by the COVID-19 pandemic.
The global supply chain crisis sparked a new awareness among decision-makers of the importance of a more distributed logistics and production base, one that offers warehousing alternatives located closer to the end consumer.
Other factors propelling the interest in flexible warehousing include rising rents, geopolitical uncertainty, and increased inventory fluctuation.
As one of the nation’s most important logistical hubs, Southern California is slated to become one of the most important centers for flexible warehousing in the United States.
According to information cited by CBRE, California ranks first on the list of states with the most warehouse requests on the Flexe platform, a company focused on omnichannel logistic programs.
And while flexible warehousing is by now a niche market within the logistic industry, its potential and benefits shouldn’t be overlooked by property owners and entrepreneurs in SoCal.
For more news about the most recent developments in the CRE industry, be sure to check out our previous posts, “California Approves Converting Shuttered Malls and Stores Into Housing,” and “The Global Sand Shortage and Its Implications for Real Estate.”
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