A review of 3PL storage rates around Australia

Welcome to uTenant’s 3PL Market Roundup report for Q4 CY2024. This report looks at ambient pallet storage rates across Australia from October to December; providing valuable insights for businesses seeking third-party logistics (3PL) warehousing solutions, whilst also allowing 3PL providers to benchmark their own rates. We leverage data from our Warehouse Storage and 3PL (PalletMatch) service to present median storage rates for each State and give you an indication of the current 3PL landscape.

Overall, the national median pallet storage rate decreased by about 8% compared to the previous quarter, reflecting a shift in demand patterns and continued competition amongst 3PL providers across the country. The ongoing pressure on 3PL providers to keep supply chain logistics costs down saw most State’s experience a decrease in their median pallet storage rate.

Macroeconomic conditions in Q4 2024

In the RBA’s most recent Statement on Monetary Policy (November 2024), they forecast that inflation would not return to the target range until 2026.  While headline inflation is expected to be in the target range in the first half of next year, part of this is due to temporary cost-of-living relief.

The RBA stated, “On the one hand, if conditions in the labour market are stronger than expected and productivity growth remains weak, this could slow progress in bringing inflation to target. On the other hand, household spending might not increase as quickly as expected, which could mean that inflation returns to target faster. Heightened geopolitical risks and potential changes to trade and fiscal policies abroad add to this uncertainty.”

The recovery in GDP growth is expected to come a little later than was forecast in August, but household spending is still expected to increase as real incomes rise in response to tax cuts and easing inflation. The Australian Retailers Association predicted that Australians were expected to spend $69.8 billion during the lead up to Christmas (up 2.7% on 2023 figures from Roy Morgan). So, we’ll have to wait and see if slower GDP growth may lead to more cautious consumer and business spending in 2025 instead, and potentially reducing demand for goods and warehousing services in the short term.

Storage rates around the country

The data presented in this report is based on uTenant's internal data set, gathered through our PalletMatch service (undertaken with our National network of 3PL providers and customers), and may not be fully representative of the entire Australian 3PL market. It’s important to note that, pallet storage rates can vary widely based on factors such as location, warehouse size, services provided, duration of storage, and the specific business industries we're working with.

The National median storage rate for Q4 2024 is $4.00 pppw¹, down from $4.35 pppw¹ reported in Q3.

This quarter, Victoria had the greatest variation in storage rates with a low of $2.57pppw¹ and a high of $5.95pppw¹. Ambient pallet storage rates in New South Wales overall were higher, but their range smaller, with a low of $3.85pppw¹ and a high of $6.50pppw¹. Queensland’s range of $2.94 pppw¹ to $4.40pppw¹ tightened up compared to last quarter, as did South Australia with $2.80pppw¹ to $4.25pppw¹, and Western Australia with a range of $3.50ppw¹ to $4.80pppw¹.

Each quarter, uTenant's network of 3PL providers share their pallet storage rates with the PalletMatch team; enabling us to produce this insightful industry report for 3PL providers and product owners alike.

The 3PL landscape

The Australian logistics market this quarter has faced a mix of stabilising and disruptive forces. Whilst inflationary pressures have eased slightly compared to the same period last year, the RBA’s persistent focus on interest rates continues to impact consumer spending and inventory holding patterns.

Globally, the ongoing recalibration of supply chains post-pandemic has resulted in fluctuations in demand for warehouse space. Geopolitical uncertainties, including trade tensions and fuel price volatility, remain critical influencers of 3PL operations and pricing strategies. Additionally, Australia’s labour market constraints, particularly in regional logistics hubs, are applying upward pressure on costs.

As predicted in our Q3 2024 3PL Market Roundup report, we did not see the usual import inventory growth leading into December. Year-end peak would normally cause pallet storage rates to increase with the rise in demand for space and services, however, contrary to this, we saw storage rates come down quarter-on-quarter in the majority of States.

Customers with niche storage requirements, like frozen, temperature control or dangerous goods, continue to battle with scarcity in available warehouse space. On the upside for 2025 though, a handful of 3PL providers are opening new frozen and temperature control warehouses, but this will likely just service the current demand (and gap in the market) and be filled up very quickly!  

In every State, except New South Wales, we saw some 3PL providers discounting their pallet storage rates for short-term gains. Afterall, it’s better to secure clients and fill those warehouses, than have pallet rack locations sitting empty. So, until the market normalises, there are opportunities for businesses to secure lean pallet storage rates if you look in the right place.

A theme that was present throughout 2024 was demand outstripping supply – not linked to consumer spending, but to the availability of goods at point of sale and ability to service. This was not all due to global forces and offshore supply chain disruptions though, there was plenty of challenges locally with labour shortages, union activity, and rising costs. It all made for a very uncomfortable 2024 in supply chain logistics, to put it nicely.

The RBA’s uncertainty on outlook will just continue to fuel uncertainty in the 3PL market and likely result in extremely varied pallet storage rates around the country. Operational costs, property, the labour market and demand will all play big roles in influencing pallet storage rates in each State in 2025.

So, where does this leave 3PL providers trying to price their services, and businesses trying to forecast demand and supply? Well, just as unsure as the rest of us. As cliché as it is, the only thing we can be certain about is uncertainty!

3PL landscape insights

Recommendations for businesses

1. Benchmark your costs: Use the rates in this report to compare your current storage rate agreements. If you’re paying significantly above the average, consider renegotiating terms or exploring alternative 3PL providers.
2. Enhance forecasting accuracy: With rates influenced by macroeconomic factors, improving inventory forecasting can help mitigate over-reliance on expensive storage.
3. Explore value-added services: Assess whether your 3PL provider offers complementary services that can offset storage costs, such as cross-docking or fulfillment services.
4. Invest in technology: Utilise warehouse management systems (WMS) to gain visibility into your storage needs and identify opportunities to consolidate inventory.

As we look to the next quarter (Q1 2025), several factors will likely shape storage rates:

• Seasonal demand spikes tied to back-to-school and Easter periods may drive short-term rate increases.
• Continued investment in regional infrastructure could create new opportunities for businesses to access more affordable 3PL warehousing solutions.
• Global supply chain shifts, such as reduced reliance on single-source manufacturing, may ease rate volatility.
• An economic stimulus package announced for China and improved trade activity could increase demand for 3PL services, pushing pallet storage rates higher.

By staying informed and being proactive, businesses can better navigate the dynamic 3PL landscape. With the support of uTenant, businesses can benchmark and secure the best warehousing solutions for their needs, whether that be better 3PL storage rates or sharper rent if leasing your own warehouse.

Additional considerations

Beyond the headline rates, several other factors can influence the final cost of ambient pallet storage and should be taken into consideration:

• Warehouse features: Warehouses with advanced features like state-of-the-art security systems, temperature control, automation, or environmental sustainability credentials will naturally command higher rates compared to basic storage facilities.
• Contract terms: The length and structure of your contract with a 3PL provider can significantly impact the final cost per pallet. Negotiating longer contracts or committing to minimum storage volumes may lead to lower per-unit rates.
• Location: As mentioned earlier, prime locations in major cities will typically have higher storage rates than regional areas. Businesses should consider their specific needs and distribution requirements when determining the optimal warehouse location.

The 3PL market remains dynamic

Overall, the 3PL market remains dynamic, with both challenges and opportunities for 3PL providers and their clients in Q4 2024.

In Q4 we saw median pallet storage rates decrease in secondary regions (Queensland, South Australia, and Western Australia) and slightly increase in primary regions (New South Wales and Victoria).

While inflation is easing, costs for 3PL providers (such as labour, utilities, and infrastructure) are still high. This means pallet storage rates will likely stay where they are and could even rise if temporary cost reductions (like energy relief) reverse.

For businesses relying on 3PL services, understanding these inflation dynamics can help forecast future storage costs and negotiate contracts that consider potential price adjustments.

The 3PL Market Roundup report is published on a quarterly basis, in the month following the end of the calendar quarter. See 3PL Market Roundup - The methodology behind the numbers, for a deeper explanation of the report and its purpose.

It's important to note that the pallet storage figures in this report are based on uTenant’s network of 3PL providers and will change over time. To get accurate and current pricing information, we recommend contacting us directly to discuss your specific 3PL and warehouse storage needs.

- uTenant PalletMatch Team

uTenant’s team of experts have extensive knowledge of and experience in supply chain and logistics operations. With its vast 3PL provider network, uTenant is able to match clients with warehouse space specific to their current or growing needs. To put it simply, uTenant's purpose-built PalletMatch platform matches those looking for warehouse space, with those who have it – across Australia and New Zealand. Find out more about Pallet Matching and how it can help you.

If you have warehouse space to fill, get in touch with the uTenant team now.

If you are looking for warehouse space click the button below to start your search with uTenant.

¹Benchmarked on per pallet per week (pppw) or part thereof.

Published: 24 January 2025

Previous 2024 Market Roundups

3PL Market Roundup - Q3 2024: Warehouse Storage Rates

Welcome to uTenant’s 3PL Market Roundup report for Q3 CY2024, which looks at 3PL ambient pallet storage rates across Australia from July to September. This report provides valuable insights for businesses seeking third party logistics (3PL) warehousing solutions, whilst also allowing 3PL providers to benchmark their own rates. We leverage 3PL storage rate data from our Warehouse Storage and 3PL (PalletMatch) service to present median storage rates for each State, to give you an indication of the current 3PL market landscape.

We’ve seen more activity in the market this quarter for storage requirements, which reflects an overall increase in consumer spending and demand. The market has started to rebound from the extremely slow first half of the year, but there is still plenty of available storage space with 3PL providers. We would normally see available space begin to tighten significantly at this time of year, in the lead up to peak season, but things are warming up slower than usual and it may not reach the peaks in demand we saw for the years following COVID-19.  

Macroeconomic conditions in Q3 2024

In the RBA’s last Statement on Monetary Policy (August 2024), it noted that inflation is still too high and is coming down slower than expected. Overall, businesses appear to be struggling to keep up with demand, operating close to their capacity. The cost to operate, combined with labour shortages, continues to put upward pressure on the supply chain, and we are seeing this start to play out in pallet storage rates in some regions.

In Australia, there is still more demand for goods and services than the economy can sustainably supply, which is the main cause for persistent inflation. Headline CPI increased by 1.0% in the June quarter to be 3.8% higher over the year, up from 3.6% in the March quarter.

Domestic demand was more resilient in early 2024 than the RBA previously forecast. Globally, rising consumer spending and the need to restock inventory increased demand for goods from China and East Asia. This is putting more pressure on global shipping, which is already facing delays due to the conflict in the Middle East, causing longer shipping times. As a result, the cost of shipping a container has jumped significantly since May 2024. While this hasn’t yet led to higher prices for goods globally, it could push inflation up if it continues, possibly affecting the price of goods in Australia too.

Though demand has proved resilient for Industrial Property in Australia, with strong supply, incentives are increasing from troughs recorded in 2023. Sublease opportunities for warehouse space is abundant and weighing on effective rental growth in some precincts, keeping rental rates relatively stable.

Q3 2024: Storage rates around the country

The data presented in this report is based on uTenant's internal data set, gathered through our PalletMatch service (undertaken with our National network of 3PL providers and customers), and may not be fully representative of the entire Australian 3PL market. It’s important to note that, pallet storage rates can vary widely based on factors such as location, warehouse size, services provided, duration of storage, and the specific business industries we're working with.

The National median storage rate for Q3 2024 is $4.35 pppw¹, up from $4.00 pppw¹ reported in Q2.

New South Wales (NSW), once again, had the greatest variation in storage rates with a low of $2.95pppw¹ and an equal high of $7.00pppw¹ with Western Australia. Queensland’s range of $2.95pppw¹ to $5.00pppw¹ remained relatively stable quarter-on-quarter, as did South Australia with $3.20pppw¹ to $5.00pppw¹. Victoria saw an increase on the top end, with a range of $2.80pppw¹ to $6.00pppw¹.

Each quarter, uTenant's network of 3PL providers share their pallet storage rates with the PalletMatch team; enabling us to produce this insightful industry report for 3PL providers and product owners alike.

Q3 2024: The 3PL landscape

Import container volume growth was strong in early 2024 and has managed to hold up for the year, however, we are not seeing the further growth that we normally do in the lead up to year-end peak. On the upside, this will help balance out supply and demand in the market and discourage large incremental increase in pallet storage rates.

The recent global increases in shipping costs have elevated the risk of future supply chain disruptions, but for the most part, supply chains are largely operating as normal so far. Nonetheless, domestic labour and non-labour costs (including electricity, insurance, and warehousing and logistics rents) continue to place some upward pressure on 3PL storage rates in Q3.

We’ve seen strong growth in the number of requests for storage in Q3, with requests for 3PL warehousing services in Queensland and Western Australia leading the way. In fact, capacity in Queensland is becoming increasingly tighter as the year goes on.

NSW and Victoria have always seen higher demand than the other States, yet demand remained stable quarter-on-quarter, as shown in the minimal shift in the median storage rate for each State. Competition between 3PL providers, however, remains strong. This has driven some 3PL providers to cut their rates; yet those 3PL providers in prime locations with quality warehouse space have been able to charge a premium for their service. The difference between the lowest and highest pallet storage rates in NSW was $4.05 for the quarter, whilst in Victoria it was $3.20.

Victoria’s Western suburbs continue to hold an abundance of available warehouse space and 3PL providers to choose from. For those who are flexible with where they can store their inventory, this is your chance to potentially nab a good deal in the West.

Customers with niche storage requirements, like frozen or temperature control requirements, continue to battle with scarcity in available warehouse space. It’s becoming increasingly difficult to find available capacity, especially for larger requirements, and customers should expect to pay a premium rate. NSW in particular remains underserviced in respect to temp-controlled options.

In Q2 there was concern of potential shipping delays into Australian Ports with the threat of attacks on commercial ships and the risk of trade disruptions due to the escalation of geopolitical tensions. Pleasingly, this threat now seems low. A slower than expected year-end peak, combined with a lower risk of supply chain congestion, product owners will benefit from more storage capacity remaining available over the coming months.

It’s not necessarily bad news for 3PL providers, who were maybe banking on year-end peak to increase demand for their services. 3PL providers can take this opportunity to review and improve their operations and service, so they can better manage the ongoing labour shortage and increased cost to operate.

The potential delay of containers arriving into Australian Ports in the second half of the year, and the uncertainty of inventory arrival time, may see importers and businesses move away from a just-in-time inventory model and back to just-in-case; essentially storing more inventory onshore, in Australian warehouses, in the lead up to year end peak. This will once again cause available warehouse capacity to reduce and storage rates to increase.

Q3 2024: 3PL landscape insights

Recommendations for businesses

• 3PL providers should consider subleasing as a strategy. It’s possible to sublease your under utilised warehouse space to another tenant, or if you’re in the market for another warehouse you might consider subleasing as an option to get potentially sharper rates.

• If you have a requirement in Victoria or New South Wales, capacity is still available and storage rates have remained relatively stable – now is a good time to review your upcoming requirements and secure warehouse space well in advance.

Additional considerations

Beyond the headline rates, several other factors can influence the final cost of ambient pallet storage and should be taken into consideration:

• Warehouse features: Warehouses with advanced features like state-of-the-art security systems, temperature control, automation, or environmental sustainability credentials will naturally command higher rates compared to basic storage facilities.

• Contract terms: The length and structure of your contract with a 3PL provider can significantly impact the final cost per pallet. Negotiating longer contracts or committing to minimum storage volumes may lead to lower per-unit rates.

• Location: As mentioned earlier, prime locations in major cities will typically have higher 3PL storage rates than regional areas. Businesses should consider their specific needs and distribution requirements when determining the optimal warehouse location.

Q3 2024: Conclusion

Overall, the Q3 2024 logistics landscape was positive for businesses seeking warehouse storage, and also for 3PL providers. Potential shipping delays and congestion remain at bay, allowing supply chains to operate normally.

In Q3 we saw median storage rates increase in secondary regions (Queensland, Adelaide, and Western Australia) and remain stable in primary regions (New South Wales and Victoria). This generally reflected the demand in the market, but we have seen an increase in the number of requests for storage overall.

The 3PL Market Roundup Report is published on a quarterly basis, in the month following the end of the calendar quarter. See 3PL Market Roundup - The methodology behind the numbers, for a deeper explanation of the report and its purpose.

It's important to note that the pallet storage figures in this report are based on uTenant’s network of 3PL providers and will change over time. To get accurate and current pricing information, we recommend contacting us directly to discuss your specific 3PL and warehouse storage needs.

- uTenant PalletMatch Team

3PL Market Roundup - Q2 2024: Warehouse Storage Rates

Welcome to uTenant’s 3PL Market Roundup report for Q2 CY2024, which which looks at 3PL ambient pallet storage rates across Australia from July to September. This report provides valuable insights for businesses seeking third party logistics (3PL) warehousing solutions, whilst also allowing 3PL providers to benchmark their own rates. We leverage 3PL storage rate data from our Warehouse Storage and 3PL (PalletMatch) service to present median storage rates for each State, to give you an indication of the current 3PL market landscape.

Macroeconomic conditions in Q2 2024

Market escalation remains persistent as 2024 unfolds. The RBA’s inflation forecasts suggest that Consumer Price Index (CPI) is unlikely to drop below the 2-3% mark until the second half of 2025, reflecting uncertain economic outlook. The RBA also reported that household spending has been weaker and is likely to continue like this in the near term.

In Q1 CY2024, we reported that rising inflation exerted upward pressure on storage rates, as 3PL providers experienced increased operational costs, potentially leading to adjustments in storage rates to maintain profitability. Whilst cost pressures on 3PL providers remains, available capacity in warehouses has stabilised and even reduced storage rates in some regions, which we will discuss in more detail later in this report. In Q2, we saw storage rates drop in some regions down to around the $3.00 mark.

As for the Industrial Property market, supply is building, but well-located land parcels are becoming increasingly scarce, and most regions are still in supply deficit, according to the latest Australian Logistics and Industrial Market Overview Q1 2024 report by JLL. We will see the affects of this play out in the medium- to long-term.

Q2 2024: Storage rates around the country

The data presented in this report is based on uTenant's internal data gathered through our PalletMatch service (undertaken with our network of 3PL providers and customers), and may not be fully representative of the entire Australian 3PL market. Rates can vary widely based on factors such as location, warehouse size, services provided, duration of storage, and the specific business industries we're working with.

The National median storage rate for Q2 2024 is $4.00 pppw¹, down from $4.53 pppw¹ reported in Q1.

New South Wales had the greatest variation in storage rates, with a low of $3.60 pppw¹ and a high of $5.95 pppw¹. Victoria wasn't too far behind with a range of $2.80 to $5.00 pppw¹ , and in fact had the lowest recorded rate Nationally. South Australia (SA) and Western Australia (WA) both had a top range of $4.85 pppw¹ and a low of $2.90 pppw¹ and $3.00 pppw¹ respectively - this is typical of SA and WA, who tend to have similar pallet storage rates as many 3PL providers model the rates of these States collectively. Finally, Queensland had the least variation in range with a low of $3.35 pppw¹ and a high of $5.10 pppw¹.

Each quarter, uTenant's network of 3PL providers share their pallet storage rates with the PalletMatch team; enabling us to produce this insightful industry report for 3PL providers and product owners alike.

Q2 2024: The 3PL landscape

We have seen a better supply of available warehouse space, particularly in Melbourne and Sydney, throughout Q2 as demand has slowed and spending decreased in a number of retail sectors. Many 3PL providers have space available and while some are looking to sublease unused white space, others are even consolidating to smaller footholds. Demand for prime locations remains high, but certainly there has been a notable slowdown in growth from Q1 to Q2, which is reflected in storage prices nationally.

As noted earlier, quality available warehouse space (Industrial Property) remains low. So, those 3PL providers who are in prime locations, notably the East Coast of Australia, will continue to see demand from businesses seeking 3PL services. In fact, this was evident during Q2, with storage rates at the higher end, along the East Coast, in the $5.00 range.

Whilst pandemic-related disruptions to supply chains have largely resolved, the risk of other supply shocks have increased. Most recently, the threat of attacks on commercial ships is forcing vessels to reroute, and there is now some of the worst congestion ever seen at the Port of Singapore. Additionally, if there were to be trade disruptions from an escalation of geopolitical tensions, global commodity prices could increase and disrupt the supply of goods further.

The potential delay of containers arriving into Australian Ports in the second half of the year, and the uncertainty of inventory arrival time, may see importers and businesses move away from a just-in-time inventory model and back to just-in-case; essentially storing more inventory onshore, in Australian warehouses, in the lead up to year end peak. This will once again cause available warehouse capacity to reduce and storage rates to increase.

Q2 2024: 3PL landscape insights

Recommendations for businesses

• 3PL providers should consider subleasing as a strategy. It’s possible to sublease your under-utilised warehouse space to another tenant, or if you’re in the market for another warehouse you might consider subleasing as an option to get potentially sharper rates.

• With capacity available and storage rates generally lower than Q1, now is a good time to review your upcoming requirements and secure warehouse space well in advance.

• If location isn't a critical factor, explore warehouses in secondary markets to potentially find better deals.

By staying informed and being proactive, businesses can better navigate the dynamic 3PL landscape. With the support of uTenant, businesses can benchmark and secure the best warehousing solutions for their needs, whether that be better storage rates or sharper rent if leasing your own warehouse.

Additional considerations

Beyond the headline rates, several other factors can influence the final cost of ambient pallet storage and should be taken into consideration:

• Warehouse features: Warehouses with advanced features like state-of-the-art security systems, temperature control, automation, or environmental sustainability credentials will naturally command higher rates compared to basic storage facilities.

• Contract terms: The length and structure of your contract with a 3PL provider can significantly impact the final cost per pallet. Negotiating longer contracts or committing to minimum storage volumes may lead to lower per-unit rates.

• Location: As mentioned earlier, prime locations in major cities will typically have higher storage rates than regional areas. Businesses should consider their specific needs and distribution requirements when determining the optimal warehouse location.

Q2 2024: Conclusion

Overall, the Q2 2024 logistics landscape ended somewhat positive for businesses seeking warehouse storage, and somewhat negative for 3PL providers as they continue to compete for limited market share and work to manage increased operational costs. Should shipping issues and supply chain disruptions continue and increate, that could look to flip in Q3 and Q4.

In Q2 we saw storage rates reduce in most regions and 3PL providers shift their focus to value-added services and optimised operations to try gain an advantage over competitors. This short-lived reprieve for businesses seeking 3PL warehouse services will be over soon. In Q3, we are likely to see storage rates increase due to shipping delays and supply chain disruptions.

The 3PL Market Roundup Report is published on a quarterly basis, in the month following the end of the calendar quarter. See 3PL Market Roundup - The methodology behind the numbers, for a deeper explanation of the report and its purpose.

It's important to note that the pallet storage figures in this report are based on uTenant’s network of 3PL providers and will change over time. To get accurate and current pricing information, we recommend contacting us directly to discuss your specific 3PL and warehouse storage needs.

- uTenant PalletMatch Team