Over the last few years, the shipping industry has seen a trend of on-demand warehousing growing. The coronavirus pandemic led to a surge in this type of warehousing for retailers. On-demand is a type of warehousing in which services are readily available to the customer when needed. They provide flexibility and swiftness to supply chains and do not require long-term commitment. In 2022, an on-demand logistics company reported that its customers grew by roughly 128% in 2020 compared to 2019. The company even built facilities across North America to accommodate the freight.
What Led to On-Demand Warehousing Growing
In early 2020, when the pandemic began in the U.S., many speedy fulfillment companies like Amazon temporarily limited operations. The main products that came into the fulfillment centers were essential freight needing to move out urgently. This resulted in the inability of a substantial number of sellers to use the warehousing services to move their goods to their customers. Many sellers immediately searched for other substitutes to store and move their goods out quickly. This led to the growth of on-demand warehousing providers. The recent surge in e-commerce also created a need for on-demand warehouses.
On-Demand Warehousing VS Traditional 3PL
3PL or third-party logistics is the use of a separate third party to provide services. This can include the shipping of freight and warehousing for a business. Despite the boom in on-demand warehousing, some believe that traditional 3PL warehousing is the better solution. Traditional 3PLs offer a range of services for long-term relationships. Conventional warehousing companies have more excellent knowledge and experience because of their long-term relationships.
One of the main differences between on-demand warehousing and the traditional 3PL model is their method of offering warehouse space. With traditional 3PL, warehousing tends to be in one or a few centralized locations. They may have more direct, longer-lasting relationships with their clients. On-demand warehousing where the 3PL is the middleman between a business looking for a warehouse and the actual facility. While less direct than traditional 3PL, this is ideal for short-term fulfillment. Even with the differences, these warehousing solutions are equally crucial for extensive supply chains.
A1 Worldwide Logistics
Logistics is the organizing and executing of a complex task or operation. This can involve several different components that work together to produce a result. When moving freight internationally, warehousing is a typical part of the supply chain and logistics aspect. Once cargo enters the U.S., taxes and duties must be paid before the freight reaches the importer. If the importer does not plan on receiving their shipment or paying duties at a specific time, they can keep their imports in a customs-bonded warehouse.
A customs-bonded warehouse is a facility where a shipper can keep imports without paying taxes and duties for up to 5 years. A1 Worldwide Logistics provides a custom bonded facility to store your cargo before you are required to pay taxes or duties. This is ideal if you plan to save money and find customers for your goods. Contact us at 305-821-8995 to learn more about our various supply chain solutions. Along with warehousing, we provide freight forwarding, customs clearance, trucking, and more.
