Third-Party Logistics Contribute to the Leasing Activity the First Half of 2018

Third-Party Logistics Contribute to the Leasing Activity the First Half of 2018 

In an effort to speed up delivery for online shopping deliveries, third-party logistics (or 3PLs) have made a big contribution to first half of 2018. According to CBRE reports, which analyzed 100 of the largest industrial and logistic spaces by square footage, there were a total of 67.8 million square feet that showed that fifty-six of the leases were signed by 3PLs and e-commerce users.

“This was the first time 3PLs were at the top of the list, a proof-in-point that people are outsourcing as much as possible,” says Adam Mullen, CBRE Americas leader of industrial and logistics. “The strength of leasing to 3PLs shows that companies are striving to create the most flexible and nimble distribution networks possible.”

Additional data found that thirty of those leases were for spaces in excess of 750,000 square feet which tells us that 3PLs and e-commerce companies are leaning more towards large, modern facilities. The disruption happening in the demand for quicker delivery has some taking a wait-and-see approach, as they are avoiding signing long-term leases or purchasing buildings.

According to Ward Richmond, Executive Vice President of Colliers International, who specializes in brokerage services for 3PLs, the issue of supply chain is a significant, yet complex challenge. “An efficient supply chain can make or break a brand in 2018,” Richmond says.

The “Amazon effect,” a new buzz word in the industry, is the increasing demand for delivery speed and that means shippers need more help to keep up with the growing demanding. They are reaching out to 3LPs to strategically partner with them to provide speedy and efficient delivery.

As a result, 3PLs are investing heavily in infrastructure and technology to fill this gap and generate value within the supply chain, Richmond notes. Third-party logistics is becoming a mega industry led by global brands like UPS, FedEx, DB Schenker, DHL, Geodis and XPO.

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