Logistics has been dramatically transformed in the information age. The ability to collect and transmit data; to build logic using that data to direct work and plan complex, global networks; to see patterns in human consumption that were at best guessed-at only decades ago: we have managed amazing things and have years more progress to make yet. It’s exciting stuff.
Not all “innovations” are genuine. Many are marketing gimmicks and re-hashes of ideas that were current when The Jetsons were the hottest cartoon on TV. But here’s one innovation that I find fascinating: matching available warehousing capacity to storage requirements using an Air BnB approach.
To illustrate the innovation, consider the company, Flexe (https://www.flexe.com/). Flexe provides a marketplace to rent out available warehouse space by the pallet. It also provides the mechanisms to send inventory to that available space and pull inventory out of that space. All this done over the internet.
Taxi drivers hate Uber. Hotels hate Air BnB. Will 3PLs hate Flexe (and other variants)? On the surface, we might be inclined to answer affirmatively. After all, every warehouse in the world can now become a 3PL (sort of). And, any company with excess inventory will see an explosion of options in the coming years.
But the bread and butter of the 3PL industry is, for now, vastly more complex than what Flexe is offering. 3PLs are offering all sorts of services beyond pallet storage – from case and each picking, shipping according to vendor compliance, electronic data management between its customers and their customers, freight management and shipping. All this with multi-year commitments.
Besides, if a 3PL had extra capacity in its facilities, why wouldn’t it want to be part of this emerging market too?
Meanwhile, when companies set up a new facility, they do so with growth in mind. Whether new construction or leased space, that planned growth translates into available capacity in the early days of the new facility. The kind of marketplace that Flexe has set up means that these companies have a potential means of off-setting costs until such time as their own growth consumes that surplus capacity.