Warehouses to become part of the ‘sharing economy’


Co-warehousing to become the new industrial trend in Australia

In the same model as Uber, Airbnb and flexible workspace operators like IWG, co-warehousing (collaborative warehousing) allows companies to engage external parties for space and storage options when required, sometimes for short periods of time.

The positioning of warehouses has always been paramount, but in the omnichannel ecosystem, where orders need to be fulfilled from anywhere, it is essential to hold inventory and process orders close to points of demand and/or ports and major infrastructure, aiming for optimised transport and network operations that reduce operating costs. 
This is a need that has been recognised throughout the USA and that companies like Flexe, Ware2go, Stowga, OneVASTwarehouse, STORD, Log-hub and Stockspots are capitalising on.

According to Colliers International National Director, Logistics and Supply Chain Monica Velez, the shortage of industrial land and low vacancy across major Australian cities is fuelling businesses to look at alternative solutions to store their stock and fulfill their orders in a more efficient way, meaning the concept of ‘co-warehousing’ are prevalent in the USA and Europe could be the next major trend for Australia’s industrial market. 

 “Co-warehousing also referred to as the warehouse marketplace, on-demand or digital warehouse, is driven by the promise of ultra-flexible on-demand engagements between entities in need of storage and fulfillment capability in strategic locations where parties have space and resources available service operations” said Monica Velez said. 

“This concept is not limited to filling empty sheds; it extends to storage, receiving, fulfilment, inventory management and value-add services.” 

“The pioneers in co-warehousing have created a platform where, not only the user and the supplier can match their needs and obtain value, but also where the supply chain and inventory flow can be managed. 

Luke Crawford, Associate Director of Industrial Research at Colliers International, believes continued growth in online retail will help underpin the co-warehousing phenomenon in Australia, spurred on by the need for industrial occupiers to service their last mile logistics function. 

 “While online retail has grown at a rapid rate in Australia, it remains well under the US and UK markets where it is as high as 20% highlighting the growth potential in Australia,” explained Luke.

“Coupled with fluctuating demand levels, this will result in businesses looking outside the box to meet their space and operational requirements, particularly as the last mile carries an unproportionate cost in the supply chain process – this is where co-warehousing ‘s flexible offering could become particularly appealing,” said Luke.

Monica Velez said, “Increasing demands in customer expectations, the boom of digital technologies and the omnichannel phenomenon (order from anywhere, deliver from anywhere) continues to put pressure on businesses and traditional warehousing models. As a result, warehouse operations now need to incorporate flexibility, improve visibility and drive productivity and proactivity.”

“I expect the co-warehousing concept in Australia will come into effect over the next 4-7 years and be particularly beneficial for companies that experience extreme seasonal demand. Co-warehousing is likely to be well received in inner ring locations where the population density is greatest and where land and rental costs are higher, as this will assist businesses with their last mile logistics function.

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Monica Velez

National Director | Logistics & Supply Chain Consultancy | Occupier Services

Occupier Services

Sydney CBD

Based in Sydney with more than 11 years’ experience in the Logistics and Supply Chain arena, Monica previously worked in Transformation and Project Management, Logistics Engineering, Business Analysis and Operations Optimisation. She developed long term logistics network strategies for large supply chain operational hubs, served as a key advisor and participated of major commercial negotiations with 3PL supplier leading to major changes in logistics models.

Monica has experience in project development and stakeholder engagement during warehousing and transport solution design along with optimisation of projects for a wide range of industry models, including FMCG, automotive, industrial, tyres and 3PL. She has designed, costed and priced multiple warehousing and transport solutions developing high accuracy cost and resource models, business cases and major investment appraisals for automation, contract logistics, warehouse consolidation and operational optimisation initiatives of different sizes. Having completed a Master Degree in Engineering with emphasis in Logistics Management and a certification in Prince2® Project Management. Monica has huge interest in digital supply chain solutions where she has developed proof of concept initiatives.

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