‘Ware-bnb’: The rise of on-demand distro

Space across the pond

Grigg said he is often asked whether the company has ambitions to expand the flexible warehouse service to Europe, Asia or elsewhere. The short answer, he said, is “yes – eventually,” adding that there are no immediate plans to move beyond their core market of North America.

Once they do make the leap to a place like Europe, they may already have some competition, unlike the wide-open market they are currently dominating in the U.S. One young firm, call Stowga, has been operating a business similar to the Flexe model for the last 18 months, offering warehousing services across the U.K., using a network of facility owners.

“We have taken the concept of the elastic warehouse and supercharged it,” said Stowga CEO Charlie Pool. The goal, he said, is to “create a network of spaces across the globe, where inventory is not constrained by static space, and is instead stored in exactly the right place, at the right time.”

Some examples of typical Stowga customers could be a 3PL seeking overspill or buffering capacity, a forwarder looking for some short-term capacity for a client, a small business with no dedicated logistics staff that needs warehousing and help with other services or a foreign business without a local operation or local knowledge. Clients are both local and from as far away as India, China and South Africa, he said, adding that air cargo plays a major role in shipping the cargo to customers on time.

“Most of the logistics-tech space is centered around forwarding operations rather than warehousing,” said Joey Scully, Stowga’s chief experience officer. “What seems clear is that there is no direct and obvious means of digitizing the way this sector behaves.”

For temperature-controlled goods, Stowga also offers storage space that can be chilled to between 0°C and 5°C, or less than 0°C. The company has worked with a billion-dollar revenue supplements company to find a specific cold-chain site to manage excess inventory from its existing warehouse. “We were 20 percent cheaper than alternatives that could offer the same service, and we were able to identify four potential sites for the job within two days,” he said.

The implications of the virtual warehouse have even played a role in the U.K.’s Brexit saga. A Hong Kong logistics company said it aims to circumvent Brexit-related disruption by storing client’s wares in “virtual warehouses” that may be physically located anywhere outside the E.U. and the U.K. To this end, Tigers Global Logistics has become an Authorized Economic Operator (AEO) in the U.K., and has opened its seventh office in the country, in Leeds.

The virtual warehouse means that, while goods could be physically located anywhere, “they will simply appear to be located on different shelves in our system,” explained Shahar Ayash, Tigers’ London-based regional managing director for Europe. Ayash’s clients could still track their inventory and maintain “full visibility, inventory control, a single IT integration, a single tariff and one currency billing.”

Adding an AEO certification grants Tiger lower rates of compliance inspections and a reduction in the number of customs control checks, Tigers said. “The AEO certification is internationally recognized, including in key markets such as China, India, Japan and the U.S., inspiring even greater confidence in businesses worldwide to work with Tigers,” said Ayash. The World Customs Organization-backed designation marks traders who voluntarily meet a wide range of criteria and work in close cooperation with customs authorities, granting them more autonomy to manage and ensure their security.

Tigers says that their virtual warehouse will eliminate the risk of the tax and customs implications created by Brexit, while shortening last-mile transit times by, “being closer to the end consumer and yielding reduced overall costs.”