HOUSTON—Last-mile distribution centers–sometimes called “last touch” centers–generally are the final point of distribution for goods before arriving on customers' doorsteps, though the distance from the distribution center to the customer often is more than a single mile. Last-mile distribution facilities for e-commerce are popping up in close proximity to the population centers of major US 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. Some might characterize this as the Amazon effect.

“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 and logistics research. “This is an entirely new link in most supply chains that delivers on the promise of fast, super-high-performance delivery.”

CBRE analyzed the location of last-mile distribution facilities opened within just the past two years in the 15 largest US population centers, finding that these facilities are positioned, on average, between 6 and 9 miles from the center point of the largest population areas served. In compiling these average distances, CBRE focused on newly opened distribution centers smaller than 200,000 square feet in the top 15 markets.

“E-commerce clients in Houston are taking advantage of being close to Beltway 8,” says Faron Wiley, first vice president, CBRE. “They want to be in a location that gives them the ability to reach the most people within any given radius. New warehouse construction and quality land availability around the Beltway has become very attractive to potential tenants in need of a distribution outlet.”

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. Denser cities tend to have shorter average distances, such as the 6-mile average in the San Francisco Bay Area and the 6.3-mile average in Philadelphia.

“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,” Egan said. “We're also likely to see many different types of real estate considered for last-mile centers.”

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

“E-commerce clients seek out warehouse space that has good access to major transportation arteries,” Wiley tells GlobeSt.com. “This reduces delivery time and costs, and improves the availability of labor.”

Instant Insights /

Last-Mile Facilities Popping Up Near Major US Cities

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