SIC 4226
SPECIAL WAREHOUSING AND STORAGE, NOT ELSEWHERE CLASSIFIED



This category includes establishments primarily engaged in the warehousing and storage of special products, not elsewhere classified, such as household goods, automobiles (dead storage only), furs (for the trade), textiles, oil, chemicals, lumber, whiskey, and goods at foreign trade zones. Warehouses primarily engaged in blending wines are classified in SIC 5182: Wine and Distilled Alcoholic Beverages.

NAICS Code(s)

493120 (Refrigerated Storage Facilities)

493110 (General Warehousing and Storage Facilities)

493190 (All Other Warehousing and Storage Facilities)

The special warehousing and storage industry is a heterogeneous group of companies serving a variety of niche-oriented markets. Businesses in this industry serve clients with both specific and unique storage needs. Because

SIC 4226 Special Warehousing and Storage, Not Elsewhere Classified

of this diversity, changes in the types of firms in operation occur frequently.

In 2001, the warehousing and storage industry as a whole had revenues of $13.3 billion, up from $12.8 billion in 2000. Of this amount, general warehousing and storage reported $7.4 billion in revenue, followed by the refrigerated segment ($2.3 billion) and the miscellaneous segment ($2.8 billion). Only refrigerated warehousing and storage was down from the previous year. Employment for the industry as a whole was expected to increase steadily through 2012.

The majority of special warehousing and storage businesses in the 1990s were involved in petroleum bulk storage and oil and gasoline storage. Most of these warehouses were located in the vicinity of oil refineries in Texas and Oklahoma. A growing trend in the industry, however, was indicated by the steadily rising number of firms offering storage services at foreign trade zones. These facilities had expanded their services in response to increasing international trade. Frequently, these foreign trade zone warehouses are operated by companies whose primary business is custom house brokerage, classified in SIC 4731: Arrangement of Transportation of Freight and Cargo.

Companies engaged in petroleum-related storage benefited from the passage of the Clean Air Act and other environmental regulation requirements. Because states like California adopted stringent pollution control requirements in the mid-1990s, petroleum companies were forced to deliver the cleanest burning fuel available to certain markets. This clean burning fuel is shipped and stored separately from conventional gasoline and is often blended with special additives, such as oxygenates, before final delivery to gas stations.

These storage and handling requirements were taxing for gasoline manufacturers with large, inflexible operations. The petroleum storage operators, however, were positioned to capitalize on the increased storage and processing demands. These specialty warehouse operators provided customers with safe, efficient, and reliable alternatives to storing and processing the fuel in-house.

While many companies provided petroleum storage, GATX Terminals Inc., the largest independent bulk terminal operation in the world, controlled the domestic industry. The company boasted 73 million barrels of storage worldwide, employed 6,000 workers in all operations, and generated approximately $298 million in gross income for fiscal 1996. That year, GATX reported that 54 percent of its storage revenues came from petroleum, 25 percent from chemical storage, 20 percent from pipelines, and 1 percent from other products. GATX's bulk-liquid storage, distribution, and pipeline business rose sharply in 1999, with third quarter 1999 net earnings at $6 million.

In 2002, due to the war in Iraq, oil supplies were dwindling and prices rose. But near the close of 2002, not only was there an increase in production from other sources, but Iraq began to pick up as well. In addition, demand was lower than it had been during the same time in 2001. The premium prices that the oil supply was expected to command did not materialize, and refiners were able to acquire the crude supplies at lower than expected cost.

As with petroleum storage, demand for foreign trade zone storage has increased. As companies expanded internationally, their traditional storage and distribution operations have, in some cases, fallen behind the competition. Rather than building large international transportation departments, some companies chose to hire outside companies to manage international storage and distribution. In an effort to better serve customers, some foreign trade zone warehouse operators introduced customs brokerage services and freight forwarding, in addition to warehousing. These comprehensive packages provide customers with one-stop shopping in the international logistics market.

In 2001, the industry leader was Boston-based Iron Mountain Inc., with $1.3 billion in revenue and 11,300 employees. The company specialized in storage of records and other data or information products, such as microfilm, X-rays, computer disks, videotapes, and blueprints.

Baytank Houston Inc. of Seabrook, Texas, was a distant second, with 2001 revenues of $433 million and 1,200 employees. Next was Auto Warehousing Co. of Tacoma, Washington, with $201 million in revenue and 600 employees. Rounding out the top five industry leaders were Houston-based VOPAK, with revenues of $168 million and 500 employees, and Dallas-based Support Terminal Services, with revenues of $122 million and 500 employees.

Further Reading

Baker, Deborah J., ed. Ward's Business Directory of US Private and Public Companies. Detroit, MI: Thomson Gale, 2003.

Hoover's Company Fact Sheet. "Iron Mountain Incorporated." 3 March 2004. Available from http://www.hoovers.com .

"Supply Surge Hangs Over Soggy Market." Petroleum Intelligence Weekly, 25 November 2002.

U.S. Census Bureau. Transportation Annual Survey. 8 March 2004. Available from http://www.census.gov .

U.S. Department of Labor, Bureau of Labor Statistics. Economic and Employment Projections. 11 February 2004. Available from http://www.bls.gov/news.release/ecopro.toc.htm .

Walkky, Ken. "Puget Sound Business Journal." Commercial Lenders Now Find Storage Facilities Appealing, 8 December 2002.

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