The U.S. public and contract warehousing market accounts for $25.7 billion in revenues but earns just 2.7% profit margins on those revenues, according to a report by Armstrong & Associates. The contracts considered in the recent study ranged from one to seven years, with most ranging from three to five years.
Short-term contracts are not popular with logistics managers. Only 9% of contracts covered in Warehousing in the United States were of a one-year duration. This supports a conclusion of the report that the market is shifting from public warehousing to contract warehousing. Though longer terms are preferred, long contracts are also less attractive - only 14% of those reported spanned more than five years.
Public warehousing pallet handling charges vary regionally from $4.70 to $5.86, the report said.