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21
Oct
2021

Demand for Warehousing Solutions in Canada is Outweighing The Supply

by Michael Kotendzhi | Warehousing
Demand for Warehousing Solutions in Canada is Outweighing The Supply

Demand for Warehousing Solutions in Canada is Outweighing The Supply

A few days ago, I made a few online purchases, and they had the audacity of arriving at my front doorstep late. The irrational anger I felt over this minor inconvenience quickly suppressed my excitement as I rummaged through my new stuff. My glee promptly dissipated when I discovered that there had been a slight mix-up regarding one of my orders. I did the only thing one could do in such a stressful situation; I ordered comfort food. However, I soon realized that I was a prime example of the new-age consumer expecting instant, seamless service. The 'problem' is that deliveries are distributed via warehouses, but everyone expects what I expected. We now find ourselves in a situation where demand for warehousing solutions in Canada is outweighing the supply. 

And yes, the food order arrived late too.

The Future is Here, But We Seem to Have Been Caught Off Guard

E-commerce is on the rise. This has only been further propelled by the pandemic and changes in consumer behavior, and it is showing no signs of faltering. The shock of e-commerce on the warehousing industry shouldn't come as much of a surprise. It feels like a logical step; this is the direction technology has been taking us in. As the 'digital nomad' generation is gaining access to more disposable income and in-person shopping is declining, businesses are scrambling to find new warehousing solutions. With the pandemic putting many a supply chain in trouble, many companies reacted by increasing inventory. That's all good and fine, but those stockpiles need to be stored somewhere. On the other hand, with e-commerce on the up, distribution and fulfillment centers are in high demand. You can start to see what's causing the problem.

Ok, so the Demand for Warehousing solutions in Canada has Risen; what happened with the supply?

In a nutshell, supply can scarcely keep up with demand, with free storage spaces in the low - low one-digit numbers. Lease prices have been rising, with those all-important square feet fetching for quite the pretty penny. Multiple offers are being made on any available space. Furthermore, offers are being made for future warehouses as well. In some areas in Canada, the situation is being further compounded by slow approval processes. To make things worse, some cities don't have the needed available space. Take Vancouver, for instance. The ocean's proximity and mountain mean your lungs and body will be thankful. Do you know who won't be so appreciative? Businesses in sore need of industrial land.

Hard Times Call For Creative Solutions

Companies have not been idle. They have been trying to battle this growing problem of a lack of storage space in a variety of ways:

  • What can't go left or right can go up - When it comes to new warehouses, the plan is to build vertically, allowing full space utilization.
  • Call in the experts- Logistics specialists are in high demand, as businesses are looking for experienced individuals to reorganize and maximize the space they already own. It's no secret that effective supply chain management is crucial for the success of a business, maybe more now than ever before.
  • Repurposing - It's more expensive and often less convenient, but retail space is being converted more and more. The fact that companies are even considering this speaks volumes about the current discrepancy between supply and demand in Canada regarding warehousing solutions.
  • Automatization - The emergence of automated and semi-automated warehouses could help partially offset the demand-supply gap.
  • Satellites - Businesses are using previously undesirable spaces due to their location, but hard times call for such measures.

Space is a Finite Resource

What's becoming clear is that storage space is a precious resource. Moving companies such as Professional Movers Ottawa will not feel so much pressure, as they already possess the needed facilities. Moreover, the pressure is not so high on these businesses. However, for those affected most by changes in e-commerce, the heat is on.

Tight Space

It may feel like the warehouse walls are closing in, but this is an interesting time. If there is one thing you can say about the human race, it's that we know how to be resourceful when we need to be. Who knows what new solutions we will think of in response to the fact that demand for warehousing solutions in Canada is outweighing the supply. Until then, I have to say, I am feeling a bit peckish. Excuse me while I order some food online.

For over 30 years, 18 Wheels Logistics has strived to be the most customer-centric trucking, warehousing, and logistics company around. Based in Burnaby, British Columbia, Canada, 18 Wheels relies on experience and integrity to make customers happy and remain on the cutting edge of shipping and logistics management.

If you have any questions about this article or you would like to talk to us about your shipping needs, please call us at (604) 439-8938.


Michael Kotendzhi is President of Operations & Transportation and a partner at 18 Wheels.

Mr Kotendzhi oversees North American operations. Michael has over 15 years of experience. As well as a background in logistics from XPO Logistics, North America's largest contract warehousing provider.  Michael Kotendzhi has a degree in Logistics. 

Michael's experience includes supply chain management, reverse logistics, & domestic transportation.