Breakdown of sub-sectors of warehousing
Within the logistics industry, there is a distinction between warehouses and distribution centres. Warehouses were designed to store products and in some cases, to hold onto them until customer demand was higher. As supply chains became more complex with increasing globalization, some warehouses evolved into faster-paced, value-added environments where products were sometimes, packaged, or mixed, and where orders were sorted, picked, or assembled.*
Both traditional warehouses and especially distribution centres have evolved to reach higher “flow velocity” of products, but distribution centres are seen to be more customer-oriented and consumer-facing, while warehouses still fit the more traditional model of storing goods for longer periods of time. This notion of increased “flow velocity” will resonate in the section below on challenges faced by warehouse workers, when we discuss the problems of high workload and the often overwhelming pace of work. This issue will also come up in the section on technological change.
Another useful distinction is between the third-party logistics companies (3PLs) and in-house warehouse or distribution centre operations carried out by companies as they engage in their primary business – the challenge of classification discussed above. For instance, workers at a Loblaw distribution centre are certainly warehouse workers, but their employer’s primary business is selling groceries and other goods and services, not storing and delivering goods.
In some cases, warehousing activities are purely in-house or internal, and the goods being stored are used internally for some purpose without being passed along directly to a customer: for example, in an auto parts distribution centre, parts are shipped, stored and distributed and the auto assembly plant is the end user.
Still, we have included warehouse workers who work in-house or for retail, grocery, and other companies in this sector profile because the work they do is very similar to those workers, their working conditions are identical, and they face the same workplace challenges and struggles.
Because warehousing activity takes place in different sectors, different corporate structures, and across different industrial classifications, it is difficult to get a complete picture of the economic impact of the overall industry.
* “Warehouse vs. Distribution Center.” CDS Group of Companies. (https://www.cdsltd.ca/warehouse-vs-distribution-center/).