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Material Handling Solutions

How Are Businesses Dealing with Limited Warehouse Capacity?

Posted October 31, 2022

Industrial storage spaces are filling up fast and warehouse capacity has become a hot topic for logistics and material handling businesses. Products, especially durable goods, are sitting in distribution centers as retail inventory increases while consumer demand decreases, resulting in an “inventory bloat.” 

A recent commercial real estate journal report suggests that warehouse vacancies hover around 1% in major markets, and some experts are predicting this most likely will last for several years. 

In an ever-tightening market, many businesses are seeking solutions to deal with limited warehouse capacity. Naumann/Hobbs can help businesses strategically address this concern by helping them make the most of space in their facilities. 

Why Are Warehouse Capacity Issues So Common?

Warehouse capacity issues are a common problem as 2022 rolls into 2023. There are five main reasons why warehouses are so full and space is so limited:

    1. Supply chain disruption: The logistics and supply chain industries are still recovering from the market changes caused by the COVID-19 pandemic. Low inventory levels, longer wait times for goods, and lack of transportation and storage capacities all played havoc on global supply chains.
    2. Consumer cutbacks: High inflation, rising fuel prices, and a looming recession are causing many consumers to cut back on discretionary spending. This decrease in consumer demand adds up to a surplus of products in storage.
    3. The holiday rush: The seasonality of the warehousing business is impacting available storage space. Unexpected shifts in consumer demand during and after the COVID-19 pandemic caused many retailers to boost orders in anticipation of a holiday rush. However, consumer cutbacks could lead to decreased holiday sales and an oversupply of goods.
    4. Increase in e-commerce: Businesses are taking advantage of the e-commerce boom brought on by the COVID-19 pandemic and have swapped brick-and-mortar locations for online storefronts. This means that even though consumers are spending less overall, they are spending more online. This creates demand for space in warehouses and distribution centers, rather than on store shelves and in stockrooms.
    5. Poor space utilization: Some warehouses are dealing with tight capacity because they aren’t taking advantage of all available space. Learn more about how to get the most from your warehouse shelving to maximize space.

Some experts expect these factors to impact warehouse demand through 2025 or even longer.  Many logistics companies and 3PLs are responding to increased demand for warehouse space by adapting their structures and building new facilities. Naumann/Hobbs can help your business adapt and grow with expert warehouse design solutions.

How to Calculate the Storage Capacity of a Warehouse

There’s a simple equation to determine the storage capacity of your warehouse facility. All you need to do is multiply the complete square footage of your warehouse’s usable space by the facility’s maximum stack height or clear height.

For example, if your warehouse or storage facility measures 100,000 square feet and has a maximum clear height of 25 feet, you’d have 2,500,000 cubic feet of total warehouse capacity.

After you understand how much space is available with this storage capacity calculation, you can make informed decisions about how to maximize your facility to address limited warehouse capacity. The space available can influence things like aisle width, the type of warehouse racking used, the types and dimensions of products stored, and more.

How Do You Manage Warehouse Capacity?

Businesses are dealing with limited warehouse capacity by getting creative when it comes to optimizing available space. The capacity of a warehouse can increase with proper management and solution implementation.

One way warehouses can address limited capacity is by planning around their inventory. This will help keep the facility lean and agile and allow better service to customers. You can help your business manage warehouse capacity by controlling inventory levels of stock. 

Many warehouse facilities are opting to manage capacity through digitization and adopting modern technologies. This requires an entire infrastructure of computerized organization systems aligned with the right warehouse storage racks and shelving solutions. These factors come together in a warehouse management system (WMS).

The right WMS will help your business analyze inventory, automate product flows and warehouse slotting, forecast sales, create customized workflows, and help make inventory decisions with real-time information. 

Increase Warehouse Storage Capacity with Help from Naumann/Hobbs

There’s more to letting technology take over when it comes to dealing with limited warehouse capacity. A strategic material handling partner like Naumann/Hobbs can help you get down to business with customized and scaled solutions designed to help you maximize storage space in your facility.

Combat the changes coming as peak season approaches and the economy shifts by letting Naumann/Hobbs help solve problems related to limited warehouse capacity. We can match your facility with the right material handling solutions to ensure smooth operations and maximum capacity. Reach out to Naumann/Hobbs now.

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