Driver shortages. New regulations. Terminal congestion. Chassis problems. These have all led to unprecedented challenges for the drayage industry (the transport of goods over a short distance via ground freight in shipping and logistics), driving up cost and impacting service levels at the ports.
Proximity to the Los Angeles and Long Beach ports is important so that drayage costs are minimized. BCOs (beneficial cargo owners) are focusing more than ever on optimizing their supply chain by taking space close to the ports and are paying higher rental rates. In the Inland Empire, where warehouse rents are at a 27% discount when compared to the South Bay – the closest to the port, drayage costs are significantly higher.
With the explosive growth of eCommerce, there has been a push for improved last-mile delivery, shortening the delivery times and cost to reach consumers. Transportation costs are substantially higher than rent and transportation costs have been growing higher than rent so there is incremental demand from users to lower their transportation costs and locate facilities closer to the population center.
Industrial Research Director
Los Angeles Basin
+1 310 525 1918