Growth in E-Commerce to Boost the Warehouse Racking Market: Technavio

Technavio has published a new report on the global warehouse racking market from 2017-2021. (Graphic: Business Wire)

LONDON--()--Technavio market research analysts forecast the global warehouse racking market to grow at a CAGR of more than 5% during the forecast period, according to their latest report.

The market study covers the present scenario and growth prospects of the global warehouse racking market for 2017-2021. The report also lists automotive, food and beverage, and the retail industry as the three major end-user industries for the global warehouse racking market.

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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global warehouse racking market:

  • Increasing warehouse space optimization
  • Rising demand for packaged food and beverages
  • Growing e-commerce sales increasing the demand for warehouses

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Increasing warehouse space optimization

All companies cannot afford new warehouses for their requirements. The rents of multitenant distribution warehouses have been increasing in the range of 13%–16% from 2013 to 2016 in the US. Due to this, companies are trying to increase their warehouse storage capacity using the space that is already available. It is observed that when the warehouse of a company exceeds the storage capacity by around 75% to 85%, the productivity level of the warehouse decreases.

Racking systems, such as drive in or drive through racks and mezzanine flooring warehouse racks, help to utilize the space efficiently by increasing the storage density. As companies try to optimize their warehouses, the need for racking which ensures optimal utilization of space goes up, thereby increasing the warehouse racking market.

Rising demand for packaged food and beverages

With the rising population and economy in general, the number of products being purchased is increasing. The global packaged food market is expected to grow to USD 2.74 trillion in 2021. Moreover, the rising competition among food producing companies to provide better services like faster and on-time deliveries of products has led to the need to set up warehouses near the cities.

According to Shakti Jakhar, a lead analyst at Technavio for warehouse and storage research, “The rise in the consumption of packaged food and beverages is expected to increase the demand for warehouses near the cities so that on-time delivery can be provided. This augurs well for the growth of the global warehouse racking market during the forecast period.”

Growing e-commerce sales increasing demand for warehouses

Mass online retailers, such as Amazon, have increased the size and locations of their warehouse distribution centers. To increase the speed of delivery, warehouses are required to be located close to population centers. This has caused a major growth in the overall warehouse needs, especially in the major metropolitan areas, such as Kansas City, in the US.

It is observed that e-commerce requires almost two to four times as much space as other warehouse uses. Along with this, it is also observed that for every USD 900 to USD 1,200 million in new e-commerce sales, there is a requirement of about 800-1,200 million sq. ft. of additional distribution space.

“With the rising global e-commerce sales, it is estimated that the need for warehouses and distribution centers will also increase, which in turn, will increase the need for racks, and drive the growth of the global warehouse racking market during the forecast period,” says Shakti.

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Technavio Research
Jesse Maida
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US: +1 844 364 1100
UK: +44 203 893 3200

Release Summary

Technavio market research analysts forecast the global warehouse racking market to grow at a CAGR of over 5% during the forecast period, 2017-2021.


Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200