In today’s dynamic business landscape, companies are continually challenged by the need to optimize their supply chain with cost-effective solutions. As businesses continue to navigate rising lease rates, fluctuations in supply and demand, and market uncertainties, the importance of finding efficient and adaptable supply chain solutions has never been more crucial.
Amid these challenges, businesses can find value in multi-client space and flexible solutions. Whether it is coping with peak season surges, the ability to scale under one roof, or managing smaller operational footprint needs, the versatility and cost-effectiveness of multi-client warehousing offers a compelling solution.
Understanding Multi-Client Warehousing and Flexible Solutions
Multi-Client warehousing, also known as shared warehousing, enables multiple businesses to share a facility for the storage and distribution of their inventory. Unlike dedicated warehousing, which involves leasing an entire warehouse for exclusive use, multi-client warehousing shares resources and space to optimize cost efficiency for those with smaller footprint needs. Additionally, this shared model provides a flexible solution to scale operations as needed.
Flexible solutions can be flexible in terms of both contract length and square footage, and there are several ways companies can benefit from this. The first being, some businesses need a shorter-term contract to support peak season or overflow. Additionally, others may be experiencing growth, but volumes are not yet stable enough to make the CAPEX investment that comes with a dedicated warehouse. Furthermore, multi-client warehousing provides businesses with the flexibility to test and enter new markets with a smaller shared space, rather than one central dedicated warehouse.
Combatting Rising Lease Rates with Multi-Client Warehousing
Not only does the flexibility of multi-client warehousing make it an appealing solution, but it also provides a means to mitigate the cost burden amid rising lease rates. According to Colliers latest data into the market performance for year-end 2023, lease rates for all industrial types climbed to record highs last year, a year-over-year increase of 20.6%. While the surge of new industrial real estate last year improved supply to better meet demand, rental rates are still projected to increase.
Keeping this in mind, multi-client warehousing offers a strategic response to this challenge as it spreads the cost burden among multiple clients. By sharing overhead costs such as rent, utilities, and equipment, companies can minimize the impact of rising lease rates on their bottom line.
Leveraging Cutting-Edge Technology with Multi-Client Solutions
With shared space and resources comes shared technology and solutions, allowing businesses to access the latest innovations at a fraction of the cost. Unlike a dedicated warehouse model, which demands significant upfront investment, multi-client warehousing enables businesses to tap into advanced technology solutions that have already been implemented within a shared space. This cost-sharing approach ensures that even smaller operations can affordably implement state-of-the-art automation and efficiency-driving technologies.
Partnering with a third-party logistics (3PL) provider like Kenco further enhances this proposition, where multi-client facilities come equipped with the latest technology and automation. Utilizing these resources, businesses can adapt to the rapidly evolving market and gain a competitive edge.
At Kenco, we provide multi-client warehousing across North America. This flexible solution enables Kenco to accommodate smaller businesses, rapidly growing business, and businesses with distinct peak seasons. The warehouses are outfitted with innovative warehouse and inventory management systems and offer clients customizable warehouse space and supply chain management.
Solutions like AutoStore’s Robotics Shuttle system, an automated storage and retrieval system, packs goods at a high density and uses robots to retrieve them. This innovative solution implemented within our distribution center increases storage capacity while also eliminating the need for the majority of handling equipment – enabling customers to achieve maximum efficiency.
Key Takeaway:
Through multi-client warehousing solutions, companies can efficiently scale their operations, adapt to fluctuating market demands, and mitigate the financial impact of escalating lease rates. Furthermore, the accessibility of cutting-edge technology within multi-client facilities offers businesses of all sizes the opportunity to gain a competitive edge. Through strategic partnerships with 3PL providers like Kenco, businesses can achieve a cost-effective solution while capitalizing on advanced technologies and improving supply chain resiliency.
Check out Kenco’s national network of Multi-Client Space here.