News / How shifting trade patterns forced a rethink on warehousing

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Warehousing has become a far more strategic part of the supply chain in recent years, as disruption, ecommerce growth and shifting trade patterns have all pushed companies to rethink where inventory sits and how it is moved. 

Sean Mitchell, VP of customer operations at Gather AI, told The Loadstar the impact of the pandemic had been a major turning point for the sector. 

“It’s really interesting to see what Covid did to warehousing, and then the post-Covid kind of boom we’re seeing,” he said, adding that “the core competencies of a highly accurate warehouse, regardless of your demand, are incredibly important”. 

That pressure has intensified as companies try to handle more volume through fixed warehouse footprints – as Mr Mitchell put it, “a warehouse is a fixed asset”, and operators are increasingly trying “to optimise and grow and expand within that”. 

The rise of ecommerce has added to this. Sam Coiro, head of global business development ecommerce at Maersk, said online retail continued to be a major growth engine, with logistics investment following accordingly. 

“Ecommerce is definitely a growth area,” he said, and noted that operators had become better at handling flows in the warehouse through “better automation, robotics, the advent of artificial intelligence”.  

Another major change has been the growing tendency for sellers to front-load inventory into destination markets rather than ship each order individually across borders. According to Mr Coiro, many overseas merchants are “importing millions of goods at a time”, and then “doing local deployment instead of international”. 

That has significant implications for warehousing demand. Rather than relying purely on direct-to-consumer cross-border flows, sellers are increasingly placing inventory into local facilities closer to end buyers.

“Let’s take a million of these things; let’s put them in a local warehouse somewhere in the US,” Mr Coiro mimicked.  

“With the volume being shifted to multiple facilities, you can actually still get the orders up, but with a lesser amount of human capital,” he added.  

Mr Coiro noted that as inventory was becoming more dispersed and closer to end customers, this was changing traditional peak-season patterns.