E-Commerce and Tariffs Fuel a U.S. Warehouse Leasing Boom for Asian Firms

• Companies of Asian origin have begun to lease U.S. warehouses in response to a scenario filled with trade uncertainties, e-commerce expansion, and tariffs.
• Customs exemption and faster shipping requirements are driving this. Accordingly, some U.S. 3PLs have risen to prominent positions within the U.S. logistics market.

Against whatever odds, the U.S. warehouse market is now mostly seeing unbelievable demand from Asian logistics companies. And the trade-induced e-commerce surge has calmed down a bit. Some of those companies from China and elsewhere in Asia are leasing more and more space in the important hub areas of the U.S., such as New Jersey and Los Angeles. But why? It all comes down to shifts in world trade, changes in e-commerce trends, and confusion over tariffs.

The Changing World of Global Logistics

Third-party logistics providers (3PLs) are the heart of global supply chains. They handle storage, packing, and delivery for large online retailers and other businesses. Over the past twelve months, the leasing activity in the U.S. by Asia-based third-party logistics providers has more than doubled, say Cushman & Wakefield. With many warehouse lessors negatively impacted by post-pandemic demand, this flight of international tenants is offering a lifeline to the industry.

CBRE Group‘s June 2024 report underscores this trend, revealing that Chinese and other Asian logistics providers account for almost 20% of all new U.S. warehouse leases. Regardless of their growth, however, warehouse occupations in the U.S. are enacted as part of a strategic move aimed at mitigating uncertainty caused by existing and ongoing commerce.

Tariffs and Trade Tensions Are Driving Demand

The change in demand is attributed to the dynamic international trade scenario. Earlier this year, President Donald Trump reintroduced a 10% tariff on Chinese goods, stating plans to increase the tax to 20%. Many companies have begun buying extra inventories in the U.S. because they think these tariffs are going to hike costs and disrupt supplies.

Warehouses set up in America also play a role in storing products closer to awaiting customers, thus allowing quick delivery and ensuring operations keep rolling even if the regulations change.

The De Minimis Loophole: Unprecedented Changes in E-Commerce

Another significant factor is the de minimis exemption, which has recently surfaced under the U.S. legal system. This legal provision exempts goods whose value is small enough from heavy-duty levies when imported. Therefore, it facilitates that products from Asian companies find their way across the U.S. border with no levy obligations.

Speed is the buzzword here, says Tolliver, for whom the strategy serves. “Being able to ship directly from U.S. warehouses means faster deliveries, smoother returns, and ultimately, happier customers.”

So, with this provision, 3PLs in Asia are setting up distribution centres in the major logistics hubs, guaranteeing quick-turnaround online orders.

The Future of US Warehousing Company

Despite the U.S. warehouse demand in general being lower post-pandemic, 3PLs have been very successful in snagging new leases. Prospective predictions are that 3PLs will continue to be the market leaders in logistics space procurement, passing manufacturers, retailers, and wholesalers.

Otherwise, businesses keep a watchful eye on trade policies and are preparing for any eventuality. Among all the uncertainties, one thing that stands out is the emphasis that companies are placing on the flexibility and resilience of their supply chains.

Whether it is about evading terrors, hurrying e-commerce distribution, or negotiating Byzantine trade laws, Asian logistics parties are redefining the face of the US warehouse sphere. Having no signs of deceleration, the trend is therefore likely to stay for long into the future.