The Warehouse Building Rush Brought By eCommerce

The logistics maps that hold together the major hub cities of the East Coast no longer looks quite the same as it once did.

This weekend Allen Township in Pennsylvania saw a groundbreaking …well, groundbreaking. FedEx officially began construction on an 800,000-square-foot distribution center, adding yet another big piece of the shipping infrastructure that supports the eCommerce rush to the Leigh Valley area.

“Ecommerce is really changing the shape of the market,” said Perry Colosimo, a FedEx spokesman, in a written statement. “We conducted an exhaustive search across three states for the right location that would best enable us to meet this growing demand for our services … The Northeast region is a busy transportation corridor because of its population density and high concentration of businesses, and that trend is projected to continue.”

Harrisburg and York, Pennsylvania, have historically housed large warehouse clusters, given their access to population centers, non-restrictive zoning and lots of space to build on the cheap. But in recent years, as the pressure to get packages to consumers faster and cheaper has gotten high, the desirability of out of the way places has taken something of a backseat to areas like the Leigh Valley, which are that much closer to New York City and the I95/I81 corridor that connects all the major commerce centers of the East Coast.

According to some estimates, the Interstate-78/Interstate-81 corridor is the fastest growing industrial corridor in the nation. All in, developers have added 56 million square feet of space, and the market has grown a staggering 25 percent. That outpaces recent growth centers in Houston, Columbus, Ohio, and the Inland Empire east of Los Angeles. The neighborhood itself is a virtual who’s-who of America retail: Walmart Stores Inc., Dollar General Corp., Uline Inc., Ocean Spray and PetSmart Inc. have collectively added nearly 7 million square feet of distribution space in the last three years. This year alone, Samsung Electronics Co., Stitch Fix and Isuzu Motors Ltd. have signed large warehouse leases in the area.

“As supply chains have become much more heavily focused on getting access to the highest number of people in the shortest period of time, there’s been a big push to try and create an equivalent of the Inland Empire on the East Coast,” said David Egan, CBRE’s head of industrial and logistics research for the Americas. “The Lehigh Valley is really where it’s all sprung up.”