Although logistics industry growth is set to moderate in 2023, reports show that demand for industrial storage racks will remain on the upswing over the next several years.
The market for industrial racking systems is set to grow from $11 billion in 2022 to $16 billion by 2029, a roughly 6% compound annual growth rate, according to market research from Fortune Business Insights, released in late 2022. Global demand for warehouse space has been driving the trend, which is especially prevalent in the United States, where accelerating e-commerce activity has spurred the need for more modern warehouses and distribution centers (DCs).
The report cites technology advances and demand for automated warehouses as key drivers of industrial rack growth; new project implementations demand racking for automated storage and retrieval systems (AS/RS) and similar solutions, for example. E-commerce fulfillment needs–among retailers, brands, and third-party logistics services (3PL) providers–are fueling demand as well.
“The e-commerce industry creates heavy demand for advanced and seamless industrial racking systems …” according to the report, which also points to demand for faster delivery as a driving force as well.
The report shows demand coming from all industry segments, with retail leading the way, followed by manufacturing, packaging, and food and beverage.
Separately, a report from real estate firm CBRE earlier this year predicted that demand for industrial space will moderate in 2023, although the call for warehouse and distribution center space is still expected to keep up with supply. E-commerce growth remains a driving factor, as companies look for modern distribution space to help ensure faster delivery of online orders, according to the report.