On February 1^st, Gap announced a partnership with UPS and Ware2Go (UPS Owned) that opened their distribution network to small and medium-sized businesses for warehousing services.

Initially, the focus was on e-commerce, and over time this may evolve into a full suite of warehouse services. This announcement adds another rival to an already crowded e-commerce space. Gap feels their offering of 35 distribution centers, usage of robotics and technology, and customers looking for more sustainable options should make them an immediate player in the e-commerce space.

Experts feel that the future of shared warehousing will likely be shaped by customer demands, technology, and sustainability.

Technology: Advancements in automation, robotics, and the Internet of Things (IoT) will play a role in the future of shared warehousing, increasing efficiency and reducing costs.

Sustainability: Companies and their customers are becoming increasingly environmentally conscious and are expected to demand more sustainable warehouse practices.

Customer Demands: As online shopping continues to grow; customers expect fast and efficient delivery. Shared warehousing meets this need by providing multiple companies access to a wide network of facilities.

There are many skeptics that believe shared warehousing won’t work. They cite the following reasons:

Competition: Both companies may be reluctant if they share the same consumer vertical channel.

Confidentiality: Companies are hesitant to store information and products in a shared space, with the possibility of it being accessed by others.

Control: There is a concern that companies that utilize a shared space will have their receiving and orders moved to the bottom of the queue. There is also concern that the coordination of deliveries and shipments to a shared warehouse won’t take the priority that a customer may want.

The major 3PL warehouses will be watching this initiative with interest. Time will tell if this is the entry of a new competitor to the marketplace or simply a marketing vehicle to promote Gap's investment in supply chain services.