Small Businesses Getting Squeezed Out in Push for Warehouse Space

The warehouse squeeze across the U.S. increasingly is locking smaller companies out of storage space. According to The Wall Street Journal, logistics and real-estate specialists say many large retailers are demanding extra room as they cope with a glut of inventories.

The fierce competition for industrial real estate is driving up costs for smaller companies and in some cases driving them out of spaces.

The warehouse pinch is the latest sign of a capacity crunch that has cascaded through logistics markets during the pandemic, starting with the push for scarce space on container ships late last year that left small shippers waiting on the docks. The vacancy rate for warehouses has fallen nearly two full percentage points since 2020, and in Southern California facilities are effectively full. 

Bigger companies with deeper pockets are prevailing in the market, leaving smaller businesses to look for alternatives.