Big retailers are coping with the excess inventories by acquiring extra space to place their stockpiles of goods. In response to this quick action, real estate costs have risen due to companies’ higher willingness to pay. Paying a higher price does solve the problem temporarily for large retailers, however, high leasing rates and scarce storage space are squeezing small businesses out of the warehouse market. Unused stockpiles of goods have forced these companies to find alternative spaces that will not be obtained by big competitors.
As a result, unconventional storage spaces, including shipping containers and truck trailers, are being used as temporary warehouses by small retailers. This new overflow strategy has mitigated inventory imbalance due to the scalability and mobility of transport equipment. Although such an ad hoc arrangement appears to have resolved the storage shortage, it does not mean retailers can keep the whole supply chain running without any more disruptions. Occupying transport equipment for inventory storage will inevitably add stress to existing supply planning as containers and trailers are tied up for inventory placement. The resulting adverse effect on supply plans further disrupts the original transportation of goods, worsening the shrinking capacity of storage space to hold any increasing inventories.
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