Surprise! There’s actually some good news these days in the supply chain world.

The cost of distribution center and warehouse space has taken a big tumble, which could translate into savings for you and your company.

A combination of factors have driven down per-foot rental costs by as much as 40% in some cases, managers report. Today’s economy has reduced the need for space, which increased greatly over the past few years as demand rose.

Dropping prices have triggered three different reactions:

• Smaller companies have jumped ship to new quarters when their current lease expires.
• Companies have been able to bargain for lower rates while the lease is still current, and
• Companies that no longer need as much space can consolidate and lease extra space to others.

In some cases, companies have even sold the building they’re in and moved to cozier digs.

There’s also the savings that can come with housing and handling less inventory. Some companies will get used to that and keep conducting business the same way, even after the economy rebounds.

Regardless of your current situation, there’s at least a chance that the cost-saving issue could surface for consideration.

Tags: distribution center, economy, inventory, lease, space, warehouse