Report origin and scope

Brookfield, Wisconsin-based supply chain consultancy Armstrong & Associates released a comprehensive study of North American warehousing that compiles current market data, benchmarks and operational guidance. The study is titled “Even Keeled: The Business of Warehousing in North America: Market Size, Market Trends, Major 3PLs, Benchmarking Costs, Pricing, and Practices.”

The report presents detailed sector data and practical guidance for shippers, 3PLs and other stakeholders in warehousing and distribution.

Contents and key sections of the report

The publication covers a broad set of topics and tools intended to inform commercial and operational decisions. Among the items included are:

• Extensive guidelines for warehousing pricing
• Top warehousing 3PL pitfalls
• Warehousing 3PL sales benchmarks
• Data on contract lengths, warehouse sizes and revenues
• Operating margins and comparisons of expected versus actual performance

Overall U.S. warehousing market size and capacity

Based on Armstrong & Associates’ market analysis, the total U.S. warehousing market reached $221.4 billion in 2024. The firm also estimated total U.S. warehousing inventory capacity at about 12.4 billion square feet by the end of 2024.

The report distinguishes the broader warehousing market from the commercial warehousing subset: Armstrong estimated total U.S. commercial warehousing revenue at $113.5 billion in 2024.

Value-Added Warehousing & Distribution (VAWD) performance and trend drivers

Value-Added Warehousing & Distribution (VAWD) showed continued strength, with VAWD gross revenue rising 2.2% to $69.6 billion in 2024 and net revenue increasing 3.7% to $53.8 billion. VAWD accounted for 61.3% of the total U.S. commercial warehousing revenue in 2024.

Armstrong noted the historical shift in the segment: in 1996 VAWD made up only 24.7% of U.S. commercial warehousing revenue, reflecting substantial expansion over three decades. The firm expects VAWD’s share to continue inching up, projecting it will reach 61.6% in 2026.

Armstrong & Associates’ President Evan Armstrong highlighted several forces behind the rise: constrained warehouse availability, stronger e-commerce fulfillment and last-mile demand, and wider adoption of AI, automation and technologies that increase 3PL efficiency. He added that flexible, customized warehousing and improved inventory management and on-time delivery have encouraged shippers to outsource logistics to VAWD 3PLs.

E-commerce warehousing: decline, stabilization and recovery forecasts

The report examined the U.S. 3PL e-commerce warehousing segment and documented a 23% revenue decline to $27.2 billion in 2023 after pandemic-driven surges. Armstrong forecasts a recovery, with e-commerce warehousing revenue projected to rise to $34.7 billion by 2026.

After an "extraordinary" 59% annual increase in 2021, the sector has been stabilizing; the report forecasts an 8% growth rate in 2025. Armstrong cited continued growth of U.S. e-commerce retail sales—outpacing overall retail—driven by fast, convenient delivery options such as two-hour windows.

Armstrong also reported results from a 2025 warehousing survey showing U.S. e-commerce warehousing and fulfillment represented an average of 30% of total warehousing revenue, up from 26% in 2022. The report highlights rapid expansion in cold chain warehousing tied to online grocery growth.

The report identified major cost drivers for e-commerce logistics, including:

• Expansion of e-commerce retail in domestic and cross-border markets
• Complex logistics networks and warehousing development
• Increasingly complex last-mile delivery requirements
• Shift toward B2C volume in the parcel segment
• Tight labor markets
• Rising importance and cost of reverse logistics

Because of these costs and complexities, retailers are increasingly turning to Amazon and experienced third-party logistics providers to manage omnichannel and e-commerce operations.

Public warehousing and commercial market composition

The report shows public warehousing revenue comprises about 39% of the commercial warehousing market, estimated at $43.9 billion in 2024. By contrast, VAWD 3PLs represent roughly 61% of the total U.S. commercial warehousing market.

These figures reinforce the growing dominance of value-added services within the commercial segment and the relative decline of basic public warehousing as a share of the market.

Advice for shippers: pricing reviews and RFP preparation

Armstrong urged shippers to revisit pricing and contract terms, particularly if existing VAWD pricing was set during the post-shutdown demand peak. He recommended benchmarking current operations against prevailing market prices and issuing Requests for Proposals (RFPs) to update pricing and contract terms well ahead of renewals.

To prepare a successful 3PL RFP, Armstrong emphasized the importance of assembling a comprehensive dataset of products, orders and shipments. He advised structuring the RFP to yield comparable bids to streamline contracting and implementation with bidding 3PLs.

Five common pitfalls when outsourcing warehousing

Drawing on decades of experience working with companies that outsource logistics, Armstrong & Associates identified five recurring mistakes that hinder successful outcomes. These are:

1. Not benchmarking warehouse pricing against current market rates
2. Failing to engage 3PLs at the appropriate organizational level to secure focused executive leadership
3. Running a warehousing RFP without providing bidders a solid operating profile, product item master and order data
4. Using a weak RFP template that prevents apples-to-apples bid comparisons
5. Re-contracting immediately with an incumbent 3PL that is operating below expectations or under a lopsided contract

Implications for the industry going forward

The Armstrong report paints a picture of a large, evolving U.S. warehousing market: sizable total market value, increasing inventory capacity and a persistent shift toward value-added services. For shippers and 3PLs, the report underscores the need for precise pricing, robust RFP data and strategic contracting to align costs, performance and service complexity as e-commerce and technology reshape warehousing demand.