ITS Logistics Distribution + Fulfillment Q1 Index: US Warehouse Rent Hikes Signal Industry Response to Evolving Market Dynamics

RENO, Nev., Feb. 04, 2025 (GLOBE NEWSWIRE) -- ITS Logistics today released the Q1 ITS Logistics US Distribution and Fulfillment Index, Powered by Cresa. This quarter the index reveals that warehousing costs are estimated to account for 13% of the total supply chain expenses, while last-mile delivery holds the largest share at 41% of the total supply chain costs.

?The 1.03% increase in the Producer Price Index (PPI) for warehousing and storage services from August 2024 to December 2024 reflects a modest upward trend in the costs associated with these services,? said Ryan Martin, President of Distribution and Fulfillment for ITS Logistics. ?This increase could be attributed to several factors, including seasonal demand fluctuations, inflationary pressures, or higher operating costs such as labor, energy, or real estate expenses.???

According to a recent Wall Street Journal article, developers have slowed down on the construction of new buildings, which has constrained the new space that?s available. In addition, an increase in pricing has occurred. Cushman & Wakefield also reported that about 426 million square feet of new warehouse space was established last year. That number was down 31% from a year earlier. Average asking rent across the U.S. also rose to $10.13 per square foot in the fourth quarter, which was a 4.5% increase from 2023 and a 61% increase from the fourth quarter in 2019.

?From a business perspective, this rise suggests that providers of warehousing and storage services are adjusting their prices in response to market conditions or cost structures,? continued Martin. ?For customers, this highlights the importance of strategic planning and potential renegotiation of contracts to mitigate cost impacts. For service providers, the consistent increase reinforces the need to maintain competitive service quality while managing operational efficiency.?

This growth suggests a stabilization and slight rebound in warehousing costs after the earlier declines observed in Q3.

ITS Logistics offers a full suite of network transportation solutions across North America and omnichannel distribution and fulfillment services to 95% of the U.S. population within two days. These services include drayage and intermodal in 22 coastal ports and 30 rail ramps, a full suite of asset and asset-lite transportation solutions, omnichannel distribution and fulfillment, and outbound small parcel.

The ITS Logistics US Distribution and Fulfillment Index tracks the Producer Price Index (PPI) for Warehousing and Storage and offers a regional markets overview to optimize warehousing and delivery costs. All major markets in the US are highlighted each quarter via the Index. Visit here for a full, comprehensive copy of the index with expected forecasts for the US distribution and fulfillment sector of the supply chain industry.

About ITS Logistics
ITS Logistics?is one of North America's fastest-growing, asset-based modern 3PLs, providing solutions for the industry?s most complicated supply chain challenges.?With a people-first culture committed to excellence, the company relentlessly strives to deliver unmatched value through?best-in-class service, expertise, and innovation. The ITS Logistics portfolio features North America's?#19 asset-lite freight brokerage, the?#12 drayage and intermodal solution, a?top 50 dedicated fleet, an innovative cloud-based technology ecosystem, and a nationwide distribution and fulfillment network.

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Source: ITS Logistics