Melbourne, Australia (PRWEB) September 10, 2012
In the five years through 2012-13, external conditions have challenged operators in the General Warehousing and Cold Storage industry. Industry revenue is forecast to grow at a compound annual rate of 0.2% over the five-year period, to reach $7.67 billion in 2012-13 (growth of 1.3% from 2011-12). Since the mid-1990s, the development of vertically integrated supply chains in many Australian transport industries has transformed the industry. As a result, the average amount of inventory held compared with sales has decreased as manufacturers, retailers and wholesalers hold less stock. According to IBISWorld Industry analyst Caroline Finch, “the industry handles growing volumes, but time spent in storage is decreasing”. The inclusion of warehousing and cold storage in these supply chains has caused a dramatic shift in the way the industry operates. Most notable is the introduction of sophisticated automated picking and storage systems, tracking software and ancillary services. These systems are designed to offer detailed information for effective just-in-time inventory management.
These changes have made the industry more efficient but also more vulnerable to drops in demand. “The industry has recorded revenue growth in most of the past five years, except for 2008-09 and 2009-10 when major markets reduced their inventory levels due to the economic downturn”, says Finch. The accompanying decline in industrial production and imports hurt industry revenue. However, slower retail sales partly offset the lower level of stock flowing into warehouses. Slow retail sales meant that existing stock turned over infrequently and some inventories increased in late 2008. However, retailers and manufacturers slashed orders of new stock, resulting in a gradual decline in inventories through the year that outweighed this effect. The industry is well positioned to continue growing as the outsourcing of warehousing and transport services increases. Over the next five years, the industry is expected to grow faster than GDP.
The General Warehousing and Cold Storage industry displays a low level of market share concentration. There is a trend in the industry towards consolidation. Third party logistics are driving this trend. Warehouses have become sites where goods are finished for final delivery, orders are fulfilled, picked and packed and returns accepted. The industry is settling into different segments, with warehouses owned as part of a greater transport network up the top in terms of growth. However, the industry is still dominated by medium-size businesses. More basic service offerings still dominate the industry, indicating that there is room for more consolidation to come as the next generation of intermodal hubs and industrial parks is built. The four major players are Linfox, TNT Australia, Toll Holdings, and Versacold Australian Holdings.
For more information, visit IBISWorld’s General Warehousing and Cold Storage report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry provides third-party storage or warehousing services, excluding grain storage. Storage can be under contract, which may include distribution, or on an ad hoc basis such as self-storage. Warehousing services can be private or public, but both services attract a fee for storage of goods.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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