Warehouse capacity in the United States is running out! Less than 1% of available space at ports

Foreign media recently broke a rather urgent situation. The decline in demand in the U.S. retail industry has caused the capacity of warehouses and ports across the country to drop rapidly!

According to the latest Warehouse Pricing Index (WPI) from Warehouse Quote, the available space in retail warehouses in the United States is about 3%, while in port warehouses, the available space is only 1%. At the same time, due to the increasing demand for warehouse storage space in the retail industry, the profits of warehouse lessors have increased by nearly 20% in half a year, and the inflation rate of the entire warehousing industry is quite high.

There are many reasons for this phenomenon, most of which can be attributed to two main points. First, changes in consumption structure have led to a decrease in demand for many non-essential products during the mid-year promotion, resulting in a serious backlog of non-essential inventory. (Add my WeChat ID zyqmda to get high-profit product selection tips) Amazon and Walmart both have very high inventory levels. Although Amazon just held a historic Primeday event half a month ago, the performance of non-essential categories in the event was unsatisfactory, which accelerated the warehouse inventory level to the limit.

Another point is that more self-operated retailers, including Walmart, Target and Amazon's own brands, tend to stock up on more long-term necessities, such as home appliances, toilet paper, etc. This is because giant retailers predict that the current inflation rate in the US market will not be solved in the short term, and the overall increase in prices in the future is inevitable. Buying these long-term stocks early and selling them in the future can generate considerable profits.

This is why retailers are indifferent to the inventory levels that are about to explode, and even call it "healthy inventory levels." More than one retailer has expressed that they are happy with the increase in inventory. Target's inventory level in the first half of the year increased by more than 40.4% compared with the same period last year! However, a Target spokesperson still stated that "inventory levels are being closely controlled" and there will be no excess goods or price cuts.

As retailers continue to improve their warehouses, warehouses in traditional popular storage locations such as California are quickly filled up, and these locations have to transfer goods to less popular locations such as Arizona, Texas and New Jersey. Frequent transportation has led to a surge in local freight rates in these areas, and the increase in warehouse prices in the southwest and northeastern United States is far ahead of the average level of the entire United States.

In addition to the increase in freight rates caused by frequent transportation, the locations of these warehouses are also experiencing rising operating and distribution costs due to a shortage of manpower. Data shows that labor prices in the Midwest region of the United States have increased by more than 23% year-on-year. In Michigan, the labor shortage has resulted in an average of at least 5% of job vacancies per warehouse per month, and warehouse workers are now more scarce than delivery drivers.

The most direct effect of these situations on our sellers is that there will be another wave of price increases in freight and storage fees. Cost will be the most difficult hurdle for sellers to overcome this year. At this point in time, if you want to survive this cold winter, cross-border sellers must work together to keep warm.