California Crunch: Warehousing Issues on the West Coast

With historical congestion in the Los Angeles and Long Beach ports, US importers are acutely feeling the pain. There just isn’t enough space to store incoming freight in warehouses. Stakeholders are trying to provide relief for this issue, from filling parking lots with drop trailers, or securing warehouse space outside port markets, to even diverting freight to the East Coast. California’s Inland Empire, a strategic warehouse and fulfillment region for the LA ports,  saw a 0.7% vacancy rate in Q3, according to CBRE. That’s the lowest commercial real estate company has ever tracked for a market. 

Those facilities that are e-commerce-focused will have space requirements beyond the traditional warehouse need. Return processing will be included in required capacity as well as a space for seasonal fluctuations. Additional warehouse capacity is underway in the construction pipeline, just not as much as previous years. There is more than 21.3 million square feet of industrial real estate space under construction in the Inland Empire as of Q3, which is a market that has 588 million square feet in total. A lack of capacity in warehouses can and will start bleeding into companies’ ability to fulfill orders.

Read more about it here at Supply Chain Dive.