- FedEx Ground has begun building an 800,000-square foot automated distribution center in Allen Township, PA, a facility that will be its largest warehouse in the U.S.
- The new facility is the latest such center to sprout in Pennsylvania's Lehigh Valley area, which offers close proximity to New York City and northern New Jersey—ideal for shippers and retailers grappling with the growing need to support faster e-commerce delivery options.
- FedEx joins Wal-Mart, Dollar General, PetSmart, Samsung and other companies with large centers or leased warehouse space in Pennsylvania's Interstate-78/Interstate-81 corridor. Since the end of the Great Recession in the second quarter of 2010, no other U.S. industrial market has grown faster, the Wall Street Journal notes.
It's easy to look at what's been happening in the Lehigh Valley for the last several years, and then hear that old real estate mantra running through your mind: "location, location, location." But the more appropriate mantra to hear might be "now, now, now."
While retailers and shippers like FedEx are on a hunt to find open land or existing warehouse space in locations near large cities to erect state-of-the-art logistics facilities, the biggest reason behind all the activity is the seeming unstoppable growth in ever-faster, more flexible, customer-driven shipping options.
This trend is similar to the booming market for building ever-larger data centers on the fringes of major population centers, which also by the way support the website and content businesses of the same e-commerce retailers driving the warehouse building boom. In both cases, customers are demanding faster service and higher quality of experience. Retailers and shippers are responding with offers like Amazon Prime Now, Wal-Mart's ShippingPass and similar programs.
The market viability of such services is enabling companies to invest more money in warehouse automation and intellgent logistics that are key to building bigger distribution centers. You can't ship it quickly if you can't find it quickly.
Of course, as retailers and shippers invest a lot of money in increasingly large and increasingly intelligent facilities, they should also be sure to start setting aside more money for future real estate purchases and rent fees, because all this activity in Lehigh Valley is going drive real estate speculators looking for the next warehouse mecca.