Logistics firms are finding new options to deal with a scarcity of storage, including building multistory facilities and choosing locations farther from coastal ports.
As retailers and logistics companies try to stockpile goods to hedge against supply chain problems, they are facing a new challenge: In many parts of the United States, there is little to no space available to stash the merchandise.
The shortage of commercial warehouse and industrial space is the latest fallout from pandemic-fueled growth in online shopping and shows few signs of abating. But the squeeze is spurring new thinking about how to manage storage, handle distribution and set up new delivery systems for everything from pet food to beauty supplies.
Logistics firms are taking several steps to deal with the scarcity of storage space, like signing deals for new space long before ground is broken and expanding searches for sites farther from coastal ports, to such areas as Knoxville, Tenn.; the Lehigh Valley in Pennsylvania; and Reno, Nev.
These facilities have begun to take hold in urban areas where quick delivery has become the norm, and companies have begun to stockpile supplies to prevent shortages, said Dov Hertz, the founder of DH Property Holdings. He said he planned to open a three-story warehouse in Red Hook, Brooklyn, by the third quarter of 2022, adding that it was already fully leased to Amazon.
Distributors “have to have additional supply on hand to weather the inconsistencies in supply chain delivery,” Mr. Hertz said.
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DH Property Holdings is a leading real estate development, investment and asset management firm focusing on complex industrial distribution warehouses in dense, urban-core areas.
