Dive Brief:
- Third-party logistics providers have ramped up their large warehouse leasing activity in 2024 to accommodate increased demand, according to a Nov. 11 CBRE report.
- Through Q3 2024, 3PLs accounted for 498 new leases and renewals featuring at least 100,000 square feet of space, or bulk leases, a 9% year-over-year increase.
- "On a quarterly basis, bulk leasing by 3PLs has steadily increased this year, reversing the steadily decreasing trend of 2023," CBRE said.
3PLs secure more large warehousing space in 2024
Dive Insight:
The growth in 3PL bulk leasing activity is largely driven by growing retailer interest in outsourcing their warehousing and distribution needs, according to CBRE.
While insourcing logistics operations can offer greater control, experts say 3PLs provide increased flexibility for growing brands, typically at a lower cost.
"Using a 3PL also allows companies to switch supply chain costs from capital to operational expenses, which helps reduce upfront costs, increase capital flexibility and improve budget predictability," CBRE said.
Additionally, companies are drawn to 3PLs' established warehousing presence in key markets, according to CBRE. This includes California's Inland Empire and Pennsylvania's I-78/81 corridor, where 3PLs have accounted for 45% and 50% of bulk leasing activity, respectively, so far this year.
"Labor disruptions, extreme weather patterns and geopolitical uncertainty have led many companies to diversify their import locations," CBRE said. "Utilizing 3PLs allows for more inventory flexibility, a key component to retailer success in times of uncertainty."
Through Q3, 3PLs claimed the largest share of bulk industrial leasing activity at 34.1%, per CBRE. General retail and wholesale occupiers came in second with 26.6% of market share. While both sectors grew their share compared to the same period in 2023, 3PLs' gains outpaced that of retailers.
