Choosing the right warehousing partner in India
Warehouse rents in India are increasing, but that's not what you need to worry about
According to ‘Research and Markets’, India’s warehousing market is expected to reach INR 2,872.10 bn by 2027, expanding at a CAGR of ~15.64% during 2022-2027. Another report by Morgan Stanley projected that India will triple its manufacturing base as more companies opt for friend shoring and move out of China. Logistics is poised for exponential growth and warehousing will be in high demand across India.
Warehouse rent all over India has been growing steadily with Tier 1 and Tier 2 cities showing great promise, however if you are a business looking for a warehouse space, it is not the rent that you should be worried about. With high growth potential, there will be a surge of new entrants and not everyone will be a right match.
The manufacturing and ecommerce industry needs to be vigilant about choosing their warehouse partner, as this may be a defining factor in long-term business growth.
There is no lack of space
Anyone with a decent space can offer the place for warehousing. But that’s not all that a business is looking at. Warehousing is a complex process today and businesses are looking for a partner to help them move and store their goods in the best conditions. The warehouse needs to ensure that the goods keep moving towards their final destination while being kept in optimal conditions.
Strategic planning and location matters
Warehouses are nodal points that offer a safe space for goods in transit. It needs to be well-connected with highways, ports, airports, manufacturing sectors etc. Apart from infrastructure, the connectivity and ease of set-up matters; this is an area where state policies need to be considered. A warehouse that is strategically connected with well-set up allied services is what will make a difference to the logistics costs.
People with domain expertise make a difference
With a booming logistics industry, there will be multiple players entering the market. Freight forwarders and logistics businesses that are working in niche markets and have developed in-house expertise in those domains will be most sought after, because knowledge is power when it comes to logistics.
Manufacturing companies will need a logistics partner who understands the movement of the inventory, is agile enough to accommodate the changing demands and has a thorough understanding of the optimal time in which the goods need to be transported to the end customer.
Availability is the name of the game, so a warehousing facility that can ensure availability of the products and free the business to focus on manufacturing is an ally and a partner in business growth.
Warehousing needs to be technologically advanced
Warehousing is not just about finding a place to store the products. It needs to have technologically advanced facilities to ensure that the product movement and storage is at optimal levels. Digitization offers a level of transparency that can help businesses strategize better.
A state of the art facility with trained staff and a digital innovation or transformation team will be the logistics partner that a manufacturing firm would like to work with. Automation, specialised services like cold chain warehousing, or digital advancement like AI or ML are the future of warehousing and it is important for manufacturing to identify a forward looking logistics partner who can integrate these advancements as they become mainstream. Technologically advanced warehouses would mean a ripple effect across the manufacturing and business strategy lines, directly impacting the bottom lines.
Warehouse staff readiness is key
Warehouses run on infrastructure and people. While the infrastructure could be state of the art, if the people involved aren’t abreast with the latest technology and services, it might lead to poor experience.
Warehouse employee preparedness and understanding of the warehouse operations are paramount to maintaining efficiency and productivity. It is also important to assess their knowledge of safety protocols, equipment handling, inventory management, and operational procedures.
Warehousing facilities that conduct regular training sessions, refresher courses, and mock drills can be considered a valued partner as they are actively addressing the knowledge gaps.
While the increasing rent of warehouses reflects the demand and supply situation, it is not limited to that. The business will have to consider the value that a warehouse partner will add to optimise their business operations and then focus on the costs involved as investment and consider the return on investment.