Eleanor Finch
Warehousing is an important component of New York City's economy, with the transportation and storage of goods playing a crucial role. The city's large population of over eight million people provides a vast consumer market, making it an attractive location for businesses. NYC's comprehensive infrastructure, including trains, canals, and highways, facilitates broad shipping needs. While the initial cost of warehousing in the city may be higher, the total cost of delivering goods is often lower. The rise of e-commerce has further driven the demand for warehousing, with sales of e-commerce distribution centres even surpassing those of office and apartment buildings. The warehousing industry in NYC has seen significant growth, with real estate sales increasing by 115% between 2019 and 2021. This growth has outperformed other commercial properties and various classes of real estate within the city. The city also offers a large amount of developed space, providing desirable options for businesses.
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What You'll Learn
- Warehousing and storage employment rose by 70.7% between 2019 and 2021
- The New York metropolitan area ranks first for warehousing and utilities sector jobs
- Commercial vehicles are subject to specific stopping and standing rules
- The Warehouse Worker Protection Act safeguards workers in the warehousing industry
- The high cost of warehousing in NYC is a deterrent for some businesses
Warehousing and storage employment rose by 70.7% between 2019 and 2021
The warehousing and storage subsector is part of the transportation and warehousing sector. Industries in this subsector are primarily engaged in operating warehousing and storage facilities for general merchandise, refrigerated goods, and other warehouse products. These establishments provide facilities to store goods and do not sell them. They are responsible for keeping the goods secure and may also provide logistics services related to the distribution of goods, such as labelling, inventory control, packaging, and transportation arrangement.
The top three occupations in the warehousing and storage industry group are labourers and freight, stock, and material movers, industrial truck and tractor operators, and packers and packagers. On average, full-time employees in this industry work 42.2 hours per week and earn an average annual salary of $42,352. Part-time employees work 23.1 hours and earn an average annual salary of $19,948.
The workforce of the warehousing and storage industry in 2022 was approximately 941,466 people, with a concentration of workers in California, Texas, and Pennsylvania. The industry has seen substantial growth over the years, with employment nearly tripling from 409,000 in January 1990 to 1.2 million in August 2019. This growth is expected to continue, with the market values of warehouse and storage facilities increasing by 15.8% between FY 2022 and FY 2023.
In the context of New York City, the term "warehousing" has also been used to describe the practice of landlords keeping apartments vacant in anticipation of future rent increases or to remove them from rent regulation. This issue has gained attention due to the city's housing crisis, with tenants and advocates rallying for bills that empower tenants to report vacant and hazardous units.
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The New York metropolitan area ranks first for warehousing and utilities sector jobs
The New York metropolitan area has the highest number of transportation, warehousing, and utilities sector jobs among the top 10 metropolitan areas in the US, with 394,600 jobs in this sector. However, it makes up a smaller share of private sector employment (4.7 percent) compared to other metropolitan areas. The COVID-19 pandemic impacted the transportation and warehousing sector in New York, with air transportation, the largest subsector, employing 26,550 workers in 2021, a decrease of 5,400 from 2019. Transit and ground passenger transportation saw the most significant decline, with a 34% drop in employment from 2019 to 2021.
Despite the pandemic, the sector has shown resilience and recovered 82% of its job losses by April 2022, outperforming the total private sector recovery. The growth in the transportation and warehousing sector is driven by the rise in e-commerce and the demand for the transportation and storage of goods. The outer boroughs of New York City offered over 107 million square feet of commercial space primarily used for warehousing and distribution in 2021.
The New York metropolitan area is a hub for Fortune 500 companies, multinational corporations, and foreign companies, contributing to the demand for transportation and warehousing services. The city's diverse economy, including finance, banking, communication, and technology sectors, also supports the warehousing and utilities sector.
To protect workers in the warehousing industry, New York State enacted the Warehouse Worker Protection Act in June 2023, creating new legal requirements for employers and granting new rights to warehouse employees. This law applies to employers with 100 or more employees at a single warehouse distribution center or 1000 or more employees across multiple centers in the state. It mandates the disclosure of work speed data to employees and protects them from disciplinary action solely based on undisclosed speed quotas.
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Commercial vehicles are subject to specific stopping and standing rules
In New York City, commercial vehicles are subject to specific rules and regulations regarding stopping and standing. These rules are outlined in the New York City Traffic Rules, specifically in Section 4-08 and Chapter 4 of the Rules of the City of New York.
A commercial vehicle, for the purposes of stopping, standing, and parking rules, is defined as a vehicle designed, maintained, or used primarily for the transportation of property or the provision of commercial services, bearing commercial plates. This includes vehicles with altered seating configurations to facilitate cargo transportation and those displaying the registrant's information on the sides.
Commercial vehicles are permitted to stop alongside a vehicle parked at the curb when making expeditious pickups, deliveries, or service calls. However, they must comply with certain conditions, such as ensuring no unoccupied curb space is available within a specified distance and adhering to instructions from authorities.
In "Limited Truck Zones," commercial vehicles are generally prohibited from stopping, standing, or parking unless they are actively engaged in activities like delivery, loading, or servicing within the zone. These rules apply in specific areas of Manhattan during specified hours, excluding Sundays.
Additionally, commercial vehicles are subject to time restrictions when stopping or standing. They are typically allowed to stand in designated areas for up to three hours, after which they may be subject to parking rules. When making pickups, deliveries, or service calls, they can stand for up to 20 minutes while actively engaged in loading or unloading goods.
It is important to note that double parking, where a commercial vehicle is parked on the roadway side of another vehicle, is generally prohibited. Commercial vehicles should not block the only lane of travel in the same direction or obstruct designated bicycle lanes, unless specific criteria are met.
The correct classification of vehicles is crucial, as rules and regulations can vary. It is essential to refer to the New York City Traffic Rules and the Rules of the City of New York for a comprehensive understanding of the regulations applicable to commercial vehicles.
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The Warehouse Worker Protection Act safeguards workers in the warehousing industry
The Warehouse Worker Protection Act (WWPA) was introduced in May 2024 by Senators Markey, Smith, and Casey to safeguard workers in the warehousing industry. The legislation aims to protect warehouse workers by prohibiting dangerous work speed quotas that lead to high rates of worker injuries. It also requires companies to disclose work speed data and quotas to current and former employees, allowing them to understand their job performance and rights in the workplace. This law applies to employers with 100 or more employees at a single warehouse distribution center or 1000 or more employees across multiple centers.
The warehousing industry in New York City is an important component of the city's economy, with a significant focus on the storing and delivery of goods. The outer boroughs of New York City offered over 107 million square feet of commercial space primarily used for warehousing and distribution in 2021. The New York metropolitan area ranks first among the top 10 metropolitan areas in the nation for the number of transportation, warehousing, and utilities sector jobs.
The WWPA creates new legal requirements for employers and employees in certain warehouse distribution centers. It protects workers from disciplinary action or termination due to undisclosed speed quotas or the violation of their right to proper break time. The legislation also proposes to alter the definition of "Adverse Employment Action", which includes typical actions such as termination, disciplinary action, demotion, and other modifications to employment conditions.
The bill also calls for the creation of a Fairness and Transparency Office within the Department of Labor's Wage and Hour Division, as well as a "Quota Task Force" that will involve labor and worker advocacy organizations. This task force will work to ensure that workers are not pushed to their physical limits and that warehouses provide safe working conditions. The WWPA is endorsed by labor organizations such as the International Brotherhood of Teamsters and the United Food and Commercial Workers, demonstrating its importance in protecting the rights and safety of warehouse workers.
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The high cost of warehousing in NYC is a deterrent for some businesses
Warehousing is an important component of New York City's economy. The city's population of eight million people translates to eight million potential customers within miles of most major NYC warehouses. New York City is also home to two of the nation's busiest airports, LaGuardia and JFK, and is served by Newark Airport, located just across the Hudson River. Additionally, the Port of New York and New Jersey is consistently the busiest port on the East Coast in terms of annual tonnage. These factors make New York City an ideal location for businesses requiring large amounts of storage space, such as manufacturers, distributors, logistics companies, and e-commerce businesses.
However, the high cost of warehousing in NYC can be a deterrent for some businesses. The city can be expensive to access by truck due to tolls and other costs. Warehousing in NYC comes with a premium, and businesses may be able to find more affordable options in upstate New York or neighbouring states like Connecticut and New Jersey. As a result, cost-cutting management strategies may discourage investment in New York City warehouses.
Despite the high costs, some businesses choose to lease warehouses in New York City due to the benefits it offers. Leasing provides businesses with greater flexibility and cost savings compared to buying, as it allows them to avoid upfront costs and scale their operations as needed. Warehouses can also be customized to meet specific business needs, such as installing specialized equipment and implementing customized logistics and inventory management systems.
Additionally, the rise of e-commerce has further encouraged in-city warehousing. According to a report from the Wall Street Journal, "Warehouses are emerging as New York City's hottest property type, with the pace of growth in sales of these e-commerce distribution centers exceeding those of office and apartment buildings this year." The COVID-19 pandemic also impacted the warehousing sector, with a shift to non-store retail and e-commerce, increasing the demand for warehousing and distribution spaces.
While the high cost of warehousing in NYC may deter some businesses, others recognize the advantages of having a centralized location within the city limits. The outer boroughs of the city offered over 107 million square feet of commercial space primarily used for warehousing and distribution in 2021, excluding Manhattan. The market values of warehouse and storage facilities in New York City have also seen significant growth, with a 15.8% increase between FY 2022 and FY 2023, outpacing other commercial and industrial property types.
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