Rising Warehouse Costs
When the lease renewal is the largest number on the page.
The problem
Industrial rents, wages, and energy have all moved in the same direction. The usual response — take more space — locks in a higher fixed cost for a decade in exchange for capacity you may only need at peak.
How automation helps
Before adding square footage, it is worth establishing how much of the existing envelope is actually being used. Conventional racking gives away a large share of the building to aisles and clearances. Recovering that volume is generally cheaper than renting more of it.
Practical moves
- Recover vertical volume inside the current building
- Defer or avoid an expansion driven by peak-only capacity
- Reduce labor hours per order rather than raising wages further
- Track energy consumption at the equipment level and act on it
