2025 Supply Chain Disruptions: How Strategic Warehousing Can Help

Building an Antifragile Supply Chain in 2025 With Strategic Warehousing Solutions

With discussions surrounding potential tariff changes on imports taking centre stage, businesses are bracing to tackle any supply chain disruptions in 2025, including lingering and new concerns: the year-long closure of the Suez Canal and potential labour disruptions.

Many supply chain companies and professionals are left wondering about the effects of these economic uncertainties, how it may affect their businesses, and how they can best prepare.

Have post-election import tariffs triggered frontloading?

The National Retail Federation reported record volumes of total US imports between November and December 2024. Charles Van der Steene, President for Maersk North America, said:

“From our vantage, we see that the volumes continue to be strong. And we can conclude the inventories are being pulled forward because of the anticipation of potential disruptions. But, we do not see any panicked frontloading of cargo — but a very strong continuation of the overall import growth in the United States seen in 2024.”

Due to the higher import volumes, the demand for warehousing has grown significantly, resulting in leasing costs rising by more than 4% YoY. The need is continually increasing among the retailers and lifestyle brands, specifically in terms of adaptability for space/capacity to accommodate potential volume shifts and more resources to manage higher repositories.

How has the surge in warehousing demand impacted retail and lifestyle businesses?

For retail and lifestyle brands, increased need for warehousing space amplifies existing inventory pressures, including:

• Seasonality: For fashion retailers, stocking seasonal items like winter apparel or summer collections requires precise timing. A delay in fulfilment can turn these goods into unsold inventory, leading to markdowns or outright losses.
• Short product cycles: Fast fashion and consumer electronics operate on rapid turnover. Trends change quickly, and new models often render existing inventory outdated and obsolete.
• High returns volume: Lifestyle brands, especially in apparel, deal with significant return volumes due to sizing issues or customer preferences. Warehouses need to be equipped with reverse logistics capabilities to process/restock returned items quickly.
• E-commerce fulfillment: The rise of online shopping has increased the need for speed and accuracy in order fulfilment. Warehousing operations must support this and be optimized for direct-to-consumer (D2C) deliveries.

These pressures are compounded by surging warehouse demands, reshaping how retail and lifestyle businesses approach their inventory strategies. Traditional warehouse setups, which were optimized for predictable seasonal demands, now face significant challenges. Many companies are reevaluating their existing strategies, grappling with risks like overstocking. To thrive in this evolving landscape, businesses must explore more flexible and responsive warehousing solutions.

Why strategic warehousing solutions matter more than ever

According to a report by McKinsey, US retailers are holding $740 billion worth of unsold goods in their inventory. This underscores the need for scalable, flexible warehousing solutions that prevent stock from becoming a financial liability. Here are some key considerations:

1. Balancing seasonal and trend-driven inventory: Apparel brands risk overstocking unsold seasonal collections, such as summer/winter collections, that may lose value if not moved quickly. This is critical for fast fashion, where trends can change rapidly.
2. Addressing space constraints: Increased inventory levels drive up warehouse space demand, often pushing higher rental costs. Flexible and adaptable warehousing solutions can help alleviate these pressures.
3. Maintaining operational efficiency: Surges in inventory volumes can strain traditional warehouse setups. Partnering with 3PLs offering robust warehouse management systems (WMS) and real-time inventory visibility can ensure smooth operations.

To manage the risks associated with stockpiling due to front-loading inventories, general inventory management strategies can be followed. Strategies include auditing your existing warehouse model and implementing standardized processes for optimizing space and integrating technology to streamline your operations and improve efficiency.

At the same time, retail and lifestyle brands need to build warehousing strategies that address immediate pressures and enhance their ability to adapt to market fluctuations. This is where partnering with a 3PL provider becomes essential to stay competitive.

How can 3PL providers help you with warehousing strategies and inventory management?

To tackle high import volume and manage inventories effectively, businesses require more than in-house solutions. They need strategic partners for warehousing that go beyond space — and offer agility, efficiency, and cost management. Working with a third-party logistics (3PL) provider can alleviate the operational and financial pressures while ensuring long-term resilience.

Here’s how a reliable 3PL partner can help:

• Advanced technology integration: 3PLs can provide real-time tracking, WMS tools, and demand forecasting. This provides crucial insights into inventory levels, demand fluctuations, and potential bottlenecks arising from increased import volumes. Today, nearly one-quarter of warehouses are automated, up from just 5% a decade ago, and this number continues to grow. Partnering with a 3PL gives businesses access to these technologies, enabling smarter, data-driven decisions.
• Scalable warehousing solutions: 3PLs can offer flexible, on-demand warehousing options, allowing businesses to scale their storage capacity up or down as needed to accommodate fluctuating import volumes. They can provide additional resources and support during peak seasons or periods of high import activity, ensuring efficient handling of increased inventory flow.
• Wide network with strategic locations: 3PLs can offer strategically located warehouses near ports or transportation hubs to reduce costs associated with transporting higher import volumes. Bi-coastal or tri-coastal warehousing strategies, combined with regional distribution centres, can help brands position inventory closer to key markets, reducing transit times and delivery costs.
• High-density storage solutions: 3PLs can implement space-saving solutions like automated storage and retrieval systems (ASRS), which utilize technology to efficiently store and retrieve goods, maximizing vertical space. Additionally, they also ensure warehouse space optimization using pallet racking systems with multiple levels and mezzanine floors to create additional storage within the same space, to significantly increase storage capacity while handling increased inventory.
• Industry-specific expertise: 3PLs experienced in handling lifestyle or retail products can manage the unique storage requirements of the industry, including climate-controlled facilities for delicate clothing items and efficient order processing for time-sensitive collections.

The economies of scale offered by 3PLs can help optimize resources associated with warehousing, labour, and transportation, providing businesses with better cost control.

Warehousing, diversification, and regional strategies: What should retailers do?

As supply chain disruptions become a constant in global trade, diversification in sourcing and warehousing remains critical.

According to a report by BCG, more than 90% of companies in North America have relocated production and sourcing since 2018. This trend continues to accelerate, with 81% of CEOs and COOs planning to bring supply chains closer to market, an 18% increase from 2022. Many brands are diversifying their supply chains away from China, exploring manufacturing hubs in Southeast Asia, or even nearshoring to locations like Mexico and Canada.

However, with recent changes in Mexican tariffs on textiles and apparel, brands must evaluate whether lower labour costs justify additional trade expenses

Retailers must evaluate the trade-offs between global and regional warehousing.

While global hubs offer cost efficiencies for stable markets, they often have longer lead times. Regional warehousing, on the other hand, provides proximity to key markets and greater agility, especially with multi-regional setups. For example, one can adopt regional warehousing strategies within the US, like combining East and West Coast facilities with a Midwest hub. This can provide better proximity to customers, reduce last-mile delivery times, and thus result in significant cost savings.

The ideal approach often blends global and regional strategies to balance cost control with customer responsiveness. A provider, like Maersk, can offer a vast network of strategically located warehouses to support multi-regional setups across the United States, ensuring inventory is closer to customers. This would enhance flexibility, reduce transit times, and build supply chain resilience against any disruptions.

If your business is navigating inventory surges or warehousing inefficiencies, our integrated supply chain solutions are designed to help you stay agile and competitive. Explore how our scalable and resilient contract logistics solutions can support your supply chain needs and keep your operations moving seamlessly.