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UPS’ Latest Effort Connects E-Comm Companies to Excess Warehouse Capacity

UPS has created a new entity to meet the demands of order fulfillment in the rapid rise of e-commerce and the logistics that go with it.

The parcel delivery powerhouse has launched Ware2Go, a new technology company and digital platform that matches merchants that need to get online orders to customers quickly with available warehouse space and fulfillment services.

Ware2Go, according to UPS, augments its suite of e-commerce custom solutions tailored to support small and medium-sized companies.

“Ware2Go uses innovative online technology to match excess warehouse and fulfillment capacity with merchant demand to provide transparent inventory, order fulfillment and final delivery,” Scott Price, UPS’s chief transformation and strategy officer, said. “We’re solving for two major problems: speed to market and efficient warehousing.”

The platform will recruit and certify warehouses in strategic locations and establish a network of vetted fulfillment partners. Sellers can then position products closer to their customers without the need for researching or doing the due diligence of providers, or making long-term volume and time commitments. For warehouses, it means they can expand their customer network with a management platform that provides visibility and invoicing.

Ware2Go’s cloud-based platform and service will provide merchants with end-to-end order fulfillment, including storage, pick-and-pack fulfillment and shipping, with guaranteed two-day delivery by UPS. Since Ware2Go manages the relationships with warehouses, UPS said merchants get the service levels and pricing they might not receive on their own.

Many studies have shown that demand for warehouse space has outpaced new supply since the end of the recession. Rising rental rates and e-commerce growth have shifted warehousing from large centralized sites to localized facilities across major markets.

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The availability rate for U.S. industrial real estate declined 10 basis points in the second quarter, according to a report from CBRE Group, marking the 32nd consecutive quarterly decline and the longest streak since the real estate company started tracking the data in 1988.

Availability of U.S. industrial real estate fell to 7.2% in the second quarter, the lowest point since 2000. Giants like Amazon and Walmart have been opening warehousing and distribution centers at a rapid clip to keep up with order fulfillment demand.

Sellers who use Ware2Go sell online, primarily B2B, and want fast, consistent, time-in-transit for shipments, UPS said, but many have few distribution centers and could benefit from more warehouse space to rent in other areas of the U.S.

“The flexibility Ware2Go offers merchants and warehouse operators, especially companies in the industrial, automotive and tech sectors, means they can compete more effectively and profitably in the market,” Price said. “Ware2Go leverages the scope and scale of UPS’s network to provide an integrated delivery solution to improve management of the order-to-delivery experience.”

Ware2Go was launched after an incubation process with BCG Digital Ventures, a corporate investment and incubation firm that owns a minority financial stake.