The mounting warehouse rent in Canada is burdening the small and medium-sized logistics businesses with extra financing pressures while they are already struggling with labour shortages during booming demand which has created a perfect storm along with low vacancies in warehouses and high rental rates which is a cause of worry for the public warehouses’ operators and the 3PL industry. The warehousing rental vacancy has dropped below the national average in Vancouver which is 1% while the increase in rental prices is constant.
The real estate advisory firm Altus Group has revealed that the real estate leasing cost of the industry has seen a rise of 40% in three years in Toronto and Vancouver. The leasing costs for the real estate in the Vancouver industry are around C$17.40 per sq foot on average. The rising rent has been a pressure on the companies with the already existing high fuel prices breaking the records, wages pressure and other costs of operation in the logistics sector.
The real estate leasing cost of the industry has seen a rise of 40% in three years in Toronto and Vancouver.
Shaun Hagen, chief operating officer of CartonCloud, which is one of the logistics software providers has said that the increasing costs of the warehousing space are leaving two-way impacts on the public warehousing; by driving the need for logistics services that are outsourced while encouraging the existing logistics operators to reconsider the new revenue streams. They may now better cast their current footprints by providing new services such as 3PL warehousing or cross-docking that they may not have previously offered. He also added that while all of this is taking place, those who think out of the box can also turn this into an opportunity to capitalise by cutting the extra operational costs while the demand is booming.
Hagen also mentioned that while physical warehousing space and its cost are on the rise, there are different aspects of any business that can be controlled. One vital aspect of the operations that can be controlled by SMBs is the technology used in business. An expansion is being led by Hagen in Canada which believes that the logistics sector and the companies can benefit by turning to automated transport from processes based on paper. The company by Hagen, CartonCloud has witnessed rapid growth in Australia with its unique potential to provide SMB logistics through technology, flexible workflow, and software combinations and developed last-mile providing experience.
The warehousing rental vacancy has dropped below the national average in Vancouver.
There is a huge role of small and medium-sized companies to keep the supply chains operational. Cloud-based warehousing and transportation can help businesses to generate revenue. Automatic data entry can reduce the scope for human error and will also help SMB companies to increase their output. Technology can act as a game-changer in times of rising expenses. With software like CartonClous, large data management can be done easily and workflow can be made smooth. Different businesses can add new revenue streams with the help of this software without having to worry about storage. Investing in technology will help logistics firms to find new capabilities to conquer daily issues, enhance the growth of the company and improve efficiency.