E-commerce Sales Drives On-demand Warehousing Tech

In 2018, consumers in the US forked out $517.4 billion in E-commerce sales online. According to the US Commerce Department statistics that is an increase of 15% from 2017. This calculates roughly to
14% of US total sales. So this begs to ask a question. How is inventory optimization and inbound
logistics impacted by this?

Well, recently California-based Flowspace acquired $12 million and Atlanta-based Stord received
$12.3 million. This could be a sign that there may be an influx demand for technology that could
help retailers with their strategizing.

Multiple Models

Honestly speaking, no universal approach exists that mentions startups. For example, Stord claims to
provide 4PLs for their continental US distribution. When they do this they position their model
opposite of the more well-known startups like Flexe and Flowspace.

Comparatively speaking, Flowspace and Flexe provide a marketplace for their shippers to use
unused fulfillment services and warehouse space. They both offer order shipping, packing, and
picking for all online orders.

Flowspace has let it be known that their capabilities include arranging services for freight. These
include fulfill by Amazon, 3PLs, Rail, multi-truck, direct-to-consumer, or less-than-truckload.
With Flexe, they are better known in the warehousing sector. They have raised a staggering $19
million in support of shippers who rely on flexibility and assistance with warehousing needs as they
fluctuate during high customer-demands or seasonal times. This allows them to secure space but
without having to commit to any contracts for long-term use. Some in the industry have compared
them to Airbnb and described their approach as analogous.

Investment in the Industry is Broad

When it comes to technology, many commercial real estate companies and e-commerce sales online companies are beginning to underlie the industry. An example of this is ProLogis where they own a private venture fund that invests in technologies that specialize in various contract logistics.

Although there might be room for other models of warehousing technology, Stord relies on large
shippers to optimize their connections of inventory placement and inbound logistics. Their
fulfillment models and on-demand capacity continue to target a large amount of e-commerce as well
as smaller shippers who are able to extend warehousing space that was not feasible in the past.

Regardless of which warehousing technology is used, their approach will continue to face
competition from other well-known third party logistics companies. This includes third party
logistics who have footprints in contract logistics and others who focus solely on final mile
transportation or e-commerce fulfillment.

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