Dive Brief:
- UPS launched a digital fulfillment and warehouse matching service, Ware2Go — the latest player to enter the growing on-demand warehousing tech space.
- The service is designed to help shippers store and ship product closer to their customers without having to commit to long-term contracts. It allows warehouses to fill unused space and utilize excess fulfillment capacity.
- Warehouses must be inspected and certified by Ware2Go to offer space, and then once that space is filled, shippers can track both inventory and orders through the platform.
Dive Insight:
As online shoppers become more insistent on fast, free shipping, the pressure is on shippers to store and fulfill orders closer to their ultimate destination. At the same time, available warehouse space has been dropping steadily for years. And for smaller shippers, multiple warehouse contracts, if they can be found, can be too much to afford and manage.
Furthermore, even medium to large companies with seasonal spikes in business often struggle to find seasonal space or own space that is underused most of the year.
New sharing-economy services seek to solve this problem by matching warehouses and merchants based on the products, order volume, space requirements and delivery needs.
Ware2Go is at least the third player to enter the on-demand warehousing space, along with Flexe and Flowspace.
Flexe founder Karl Siebrecht said in 2017 that he believes on-demand warehousing will eventually make up 30% of the overall warehousing market. Siebrecht told Supply Chain Dive last year he expected competition to crop up soon. Indeed, another on-demand warehousing startup, California-based Flowspace, raised a $2.2 million Series A round of funding in June.
Ware2Go looks like a traditional startup, but the company was launched by UPS in July and incubated by BCG Digital Ventures, a group that stands up tech companies with corporate partners and maintains a minority stake in Ware2Go.
Creating, acquiring, or financing its own version of startup technology is one fairly common tactic entrenched players use to stand up to potential competition from startups.
