The Challenge of Meeting the Ever Growing E-Commerce Appetite for Warehouse Space

By Oleg Mikhailenko
Published in Problem
August 24, 2020
2 min read
The Challenge of Meeting the Ever Growing E-Commerce Appetite for Warehouse Space

The global e-commerce market is expected to break the $5 trillion Dollar amount for the first time in 2022, having taken less than five years to double its market size. As a result this growth in sales is predicted to create an adjacent demand for over six billion more square feet (five hundred and fifty million square meters) of warehouse and storage space globally between now and 2025 in order to help sustain this growth. Of this six billion square feet at least one billion of it will be needed in the United States alone.

During 2020, fueled by the global pandemic and the associated worldwide lockdowns and quarantines, the global e-commerce market grew by nearly 28%, an unprecedented and frankly eye watering amount. In US Dollar terms that growth equated to nearly a trillion more Dollars of online sales than in the previous year. Even prior to this extraordinary year annual e-commerce sales were already growing by double digit percentages year after year.

Fast forward a little to 2021 and annual e-commerce growth is still expected to be close to 15% with double digit and high single digit percentage growth predicted for the foreseeable future. Sales in 2022 are expected to break the $5 trillion Dollar amount for the first time, having taken less than five years to double its market size. For perspective the global automobile manufacturing industry is expected to total $2.7 Trillion Dollars in 2022.

So the e-commerce market is growing, great, but what’s the problem or challenge?

Well in simple terms higher amounts of sales normally means you need to sell more stuff and unless that stuff is completely digital then this means that more stuff takes up more space either at the manufacturer’s warehouse or most likely somewhere in the supply chain, closer to the customers. This growth in sales is predicted to create a demand for over six billion more square feet (five hundred and fifty million square meters) of warehouse and storage space globally between now and 2025. Of the six billion at least one billion square feet will be needed in the United States alone.

So what does six billion square feet of warehouse space look like? Well that’s a space around 15 miles by 15 miles or 225 square miles. Think about a space around the size of the cities of Chicago, Madrid or Seoul. In short the world needs a lot of warehousing space and fast in order to be able to meet the ever increasing demands of the consumer where “out of stock” and “not available for delivery tomorrow” are no longer acceptable answers.

Even with the ever increasing growth of e-commerce giants such as Amazon this warehousing demand is currently outstripping supply and the environmental damage of building hundreds of new “mega-warehouses” to counter this demand is completely unnecessary if the billions of square feet of currently underutilized and unused existing storage space could be put to use.


Tags

#e-commerce#warehousing#growing#growth#unprecedented
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The Solution (To Meeting the Ever Growing E-Commerce Appetite for Warehouse Space)

Oleg Mikhailenko

Co-Founder, CEO P2Pseller

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