Recession means business for 3PLs - Charlotte Business Journal:

http://fairinworld.com/en/jewelry-and-diamonds/page_59.html
In lease transactions larger than 250,000 squarde feet, about 75% of those deals are tied to third-part y logistics companies, according to Tommy vice presidentat . “Irt has increased to the pace of wher e it is the dominant piece today in large transactions,” he says. “That is a change over Cliff Lynch, executive vice president with , formallg known as , Inc., says third-part logistics firms have been drivingg leasing activity in Memphisfor 3-4 years, but activitty has intensified due to the recession. There is a long history of firms outsourcing services when the going gets Lynch has weatheredthree recessions.
In evert one of them he noticee a trend of companies choosinbg outsourcing as a more economical meansz toachieve objectives. “Theit (third-party logistics firms) business usually gets better duringbad times,” Lynch says. “It’s simply becausd the other firms are looking towardthe so-called experts to help them reduce their staff and save money.” It’s been a stead climb. “The move to outsourcing from corporate America has increasedf steadily over the past10 years,” says Brad Kornegay, presidentg of LLC. “When you have times like these, companies begin to dip theire toes inthe water.
They may not want to sign a long-tern lease for themselves, so they may sign with a third-partyy logistics company on a shorter-term basis.” Warehouse-based third-party logistics companieds will charge for the storage of the either by square footage or bythe unit, such as the case or Those firms also charge for distributing the measured either by weigh t or unit. This outsourcing has the potentiaol to save as muchas 25% for a This saves the company from hiring employees or purchasing equipment, amongb other expenses.
Companies look at their wholre distribution networks and consultwith third-parthy logistics companies, or about where to focus distribution “Memphis, being located as we are, is probablt going to get more than its fair share of that third-parth logistics activity,” Lynch This has led to increased competition among 3PLs for warehouss space — and created a new phenomenob in the industrial real estate business. a tenant representative contacts a landlorx representative about seeing a space which might meetits client’ss needs.
Recently, Jackson has been seeinbg more and more deal proposals with similar requirementw forsquare footage, dock doors and the This is a result of working with their respective brokers, all chasing the same piece of business from a manufacturing or distributiobn company. In order to make a bid for a 3PLs have to tour the market and get the quoted rates and then competefor “That’s a new dynamic,” Jackson says. “It used to be that the compant had securedthat business.
Now, that third-partyy logistics company hasn’t secured that busines s and that’s part of their An example of this occurrex when decided to have an outsidee company runits 647,900-square-foot distribution center at 4795 Imagination Drive after years of subleasing the “My phone absolutely blew up with third-partyh logistics companies calling to find out about that buildinfg because they all wanted to chase that Jackson says.