It is no secret that warehouses near urban markets have been a hot commodity.  Blackstone has been buying them based on the belief that rents will rise rapidly…they already own 443 million square feet in the Americas.  Much of this space is near major markets like Dallas and LA.  Blackstone’s thesis is that warehouse rent is only 5% of supply chain cost, so even large rent increases are easily borne by shippers – especially for direct-to-consumer businesses.

 

There is a lesson here for us all…Transportation cost swamps all the other costs – this is true for CPG as well as direct-to-consumer.  That is why we always recommend implementing AutoO₂ to cut transportation costs through optimized order creation.  Once that is saving money, use the same AutoO₂ technology to speed warehouse picking and loading.   Check it out here….