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REGIONAL SPOTLIGHT: MIDWEST

Tracking Today’s Supply Chain Trends into 2023

Opportunities abound for Distribution Centers of America (DCA) member companies heading into 2023. While there are challenges present and the economy is slowing down a bit, we are still fielding many requests for multiclient warehouse services. The challenge with this is space, not only in the Midwest and Chicagoland area, but across the country too.

The inquiries about space are coming from multiple verticals including retail, food & beverage, consumer packaged goods, e-commerce, and ingredient manufacturers. We expect this trend to continue as companies try to meet the demands and place inventory closer to their customers.

While the economy is slowing down, it isn’t being felt in the warehousing industry. If we had a building available right now, new customers would move in. Manufacturers are still trying to fill voids in their supply chains—moving inventory, finding warehouse workers and drivers, warehouse space, and cross-dock handling.

We are finding the runway for signing multiclient accounts has become significantly shorter. In today’s environment, companies with inquiries have an immediate need and they want to start up well within 45 to 60 days. For example, we had a customer who asked to meet at one of our facilities. We met on a Tuesday, and they brought product in on Wednesday.

While this example is extreme, warehousing companies and third-party logistics (3PL) providers that are flexible to the needs of these customers can benefit during this time of demand.

The beginning of 2022 was busy, and the pace picked up the second half of the year. We feel 2023 will be a continuation of this. Space is going to continue to be a challenge across the industry. Labor is still going to be an issue, too. Public warehouses and distribution centers continue to review and raise wages. This will keep the competition for labor high. However, companies with the proper strategies and partners in place will be able to overcome these challenges.

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