The holiday season that dominates the end of the calendar year makes up what is commonly known in the logistics realm as “peak season.” Many retailers begin to see noticeable increases as early as Halloween that steadily uptick until the year’s end. As such, the holiday season begins in July for supply chain practitioners.
While peak season and its associated challenges happen every year, fluctuating demands and economic trends often leave retailers and other shippers scrambling to store copious amounts of inventory and meet the increasingly overwhelming demands of consumers.
Sorry, No Vacancy
According to the 2019 State of Logistics Report from the Council of Supply Chain Management Professionals (CSCMP), the vacancy rate for industrial warehouses is at a record low of 4.8%. If planning has not already begun, retailers need to begin securing space now for the additional inventory they must carry to meet the demands of the peak season.
While mid-year peak season planning is common, warehouse space will be tighter in 2019 than it was in previous years. Some of these reasons for low warehouse capacity include:
- Tariffs. Escalating tariffs have caused many manufacturers and retailers over the past year to place large pre-tariff orders, resulting in larger carried inventories and less overall available space across the board. It is likely that manufacturers, retailers, and other shippers will continue to order and store larger inventories in the foreseeable future.
- Natural disasters. Record rainfall and flooding throughout the Midwestern and Southeastern United States have damaged many industrial properties. For time being, damaged warehousing space in these areas reduces overall capacity for the industry.
- E-commerce. Efforts to fulfill customer orders with same-, one-, and two-day shipping have capped warehousing capacity in nearly all U.S. urban centers. Unfortunately, these are the same areas where most retailers will want to store peak seasonal inventory.
While more spacious times are expected in the new few years, that does not solve the problems shippers will face for the 2019 peak season.
How to Handle Peak Season Overflow in 2019
There are a few steps shippers can start taking now to ensure they will have space for increased inventories later in the year.
- Optimize existing space. Conduct a thorough analysis of your existing warehousing and fulfillment spaces and see where you can make room for additional storage. This may include better shelving solutions, utilizing extra space in loading docks, or adding temporary modular storage solutions in parking lots or yards to accommodate overflow.
- Exploring secondary markets. Urban storage space is all but full, while warehousing space may be available for rent in secondary markets within a day’s haul of your distribution hub. For example, if you expect to distribute large volumes to New York and Chicago, leasing a warehouse in Ohio could serve both of those markets.
- Talk to your partners. Talk to your suppliers and logistics partners now about implementing Just-in-Time inventory practices during peak season. Balancing your inbound and outbound freight will enable you to optimize storage space.
Managing Peak Season Overflow with Phoenix Logistics
At Phoenix Logistics, we specialize in renovating and repurposing industrial real estate near key transportation lanes, offering our customers creative and innovative options for inventory storage. With our national network of distribution and warehousing facilities, we are confident that we can help you locate available overflow space for your peak season inventory anywhere in the United States. We can also assist you with optimizing transportation schedules to further optimize your existing space.
As an affiliate of the real estate firm Phoenix Investors of Milwaukee, WI, Phoenix Logistics has unique access to an expansive portfolio. Phoenix Investors’ Senior Management includes Frank P. Crivello as Chairman & Founder; David Marks as President & CEO; and Anthony Crivello as Executive Vice President. Robert Kriewaldt serves as Phoenix Logistics’ Senior Vice President. For more information, visit phoenix3pl.com.
Peak season will be here before you know it. Contact Phoenix Logistics today to discuss your peak season warehousing and transportation needs.