Demand for in-city warehousing to go up as e-commerce firms target faster, same-day deliveries

With more and more consumers shifting towards online shopping for food and groceries, e-commerce firms will look at having smaller storage space closer to catchment areas. This will push the need for modern warehouses with high level of automation capabilities within cities.

New Delhi: There will be a strong demand for in-city warehouses in the next few years as e-commerce firms target faster, same day deliveries, said Anshul Singhal, managing director, logistics firm, Welspun One.

While there are a lot of small warehouses within city limits at present, most of them are not designed for truck operations, he added. "There will be a need for warehouses with facilities for trucks to enter."

With more and more consumers shifting towards online shopping for food and groceries, e-commerce firms will look at having smaller storage space closer to catchment areas. This will push the need for modern warehouses with high level of automation capabilities within cities.

The entire warehousing industry is set for growth as pandemic hit consumers move towards online shopping.

According to the Welspun One's estimates with the impact of COVID-19, the y-o-y growth rate for the industry will need to increase by around 10% to meet additional unmet demands.

With the massive expansion anticipated companies will prefer Grade A facilities that offer compliance, human safety, hygiene and enable automation and social distancing.

The company's estimates said this will lead to an additional Y-O-Y demand for Grade A facilities by 25% over the earlier predicted demand, even if only 35% of new occupiers switch their preference to Grade A warehouses.

Additionally, soon e-commerce and retail companies will look at back up storage options in terms of large warehouses in tier ii and iii markets, away from the highest affected tier i cities, to further de-risk their supply chains.

Fuelled by factors like shift towards online shopping, accelerated e-commerce demand, inventory stockpiling, increase in demand for agri-warehousing and a more decentralized consumption footprint - there are clear indicators that the warehousing sector will witness a boom, Singhal said.

Source: https://economictimes.indiatimes.com/industry/services/retail/demand-for-in-city-warehousing-to-go-up-as-e-commerce-firms-target-faster-same-day-deliveries/articleshow/79080783.cms