In Major U.S. Cities Including Baltimore/Washington, D.C. Region, E-Commerce’s ‘Last Mile’ Really Is 6 to 9 Miles

8/3/17

DavidEgan

Last-mile distribution facilities for e-commerce are popping up in close proximity to the population centers of major U.S. cities, creating a foundation for rapid-delivery service that didn’t exist on this scale as recently as a few years ago, according to a new report from CBRE.

CBRE analyzed the location of last-mile distribution facilities opened within just the past two years in the 15 largest U.S. population centers, finding that they are positioned, on average, between 6 and 9 miles from the centerpoint of the largest population areas they serve.

Denser cities tend to have shorter average distances, such as the 6-mile average in San Francisco and the 6.8-mile average in the Washington, D.C.-Baltimore region. Meanwhile, cities that are more spread out have longer averages, such as 7.5 miles in Houston, 8.5 miles in Phoenix and 9 miles in Southern California’s Inland Empire.

In the Washington, D.C.-Baltimore region, the industrial market remains robust. The region is both densely populated and affluent compared to other markets, boasting a population of 8.1 million with a median income of $84,000. Annual retail sales for the Baltimore—Washington metropolitan area have topped $152 billion, resulting in an influx of last-mile centers moving to the region to accommodate the needs of customers expecting rapid delivery of their e-commerce purchases.

The close proximity of the last-mile facilities to huge populations of customers facilitates online shoppers’ growing expectations of nearly instantaneous delivery of their orders. Earlier this decade, goods ordered online often were delivered to customers from much larger facilities much farther away, sometimes in other states.

“These close-in fulfillment centers have proliferated within the past two years, underscoring the need for retailers to have large batches of inventory within 10 miles of most of their customers so they can fulfill orders as rapidly as possible,” said David Egan, CBRE Global Head of Industrial & Logistics Research. “This is an entirely new link in most supply chains that delivers on the promise of fast, super-high-performance delivery.”

Last-mile distribution centers – sometimes called “last touch” centers - generally are the final point of distribution for goods before they arrive on customers’ doorsteps, though the distance from the distribution center to the customer often is more than a single mile. In compiling these average distances, CBRE focused on newly opened distribution centers smaller than 200,000 sq. ft. in the top 15 markets.

“Development of last-mile strategies still is in the early stages, so the average distances in many metros is likely to shrink a bit more in the coming years,” Mr. Egan said. “We’re also likely to see many different types of real estate considered for last-mile centers.”

To view the CBRE report, click here. To see interactive maps of the last-mile distances, click here for mobile and here for desktop.

Recent Deals

Interested in advertising your deals? Contact Edwin Warfield.

Connect with these Baltimore Professionals on LinkedIn

  • Edwin Warfield

    Editor in Chief, Warfield Digital

    Connect
  • Jean Halle

    Independent Consultant

    Connect
  • Larry Lichtenauer

    President of Lawrence Howard & Associates

    Connect
  • Newt Fowler

    Partner at Womble Carlyle, LLP

    Connect
  • David Crowley

    Owner at Develop DC

    Connect
  • Carolyn Stinson

    Stinson Marketing Group

    Connect