PARSIPPANY — The landscape of package delivery has transformed dramatically in recent years. Gone are the days when residents eagerly awaited the familiar UPS truck to deliver online purchases. Today, the streets of residential neighborhoods are teeming with various delivery vehicles, including those from Amazon, Walmart, Target, Lowe’s, and many more. This shift underscores the explosive growth of the following- or same-day last-mile delivery business, which has become a significant sector within the retail industry.
The rapid expansion of e-commerce and the corresponding demand for fast, reliable delivery services have transformed the logistics landscape. The significant investment in last-mile facilities in Morris County reflects this trend, promising enhanced efficiency and customer satisfaction. As the industry continues to evolve, strategic locations like Parsippany will play a crucial role in meeting the growing expectations of consumers.
Growth in the Delivery Workforce
According to the US Bureau of Labor Statistics, 1.7 million people were employed as delivery drivers last year, projected to rise to 1.9 million by 2031. This growth is driven by increasing consumer expectations, with 83% of customers demanding guaranteed delivery dates and 80% expecting specified delivery time slots. These heightened expectations have spurred a boom in the last-mile delivery market, which is anticipated to grow by 15.62% between 2022 and 2027.
The Last-Mile Challenge
The last-mile delivery segment refers to the final stage in the logistics chain, where a package is transported from a distribution hub or warehouse to its final destination, typically the customer’s address. This stage is often the most complex and costly of the delivery process, involving multiple variables such as traffic, route planning, and customer availability. These challenges, collectively known as the last-mile problem, contribute to a 5% to 10% failure rate for first-attempt deliveries, according to TechTarget and Accenture’s “The Sustainable Last Mile Report.” Loqate’s “Fixing Failed Deliveries” report also indicates that 5% of online orders never reach the customer.
Infrastructure and Facilities
Light industrial warehouses—70,000 to 120,000 square feet—have seen the most demand, lowest availability, and highest rent growth in the industrial warehouse market to meet the rising demand for efficient last-mile delivery. Chris Zubel, senior managing director of CBRE’s industrial and logistics investors in the Americas, noted, “We’ll continue to see strong demand for light industrial facilities as e-commerce grows, which in turn means we can expect to see additional strong rent growth for these warehouses.”
Parsippany: A Strategic Hub
Parsippany, with its strategic location intersected by Route 287, Route 10, Route 46, Route 53, and Route 202, is poised to become a key player in the last-mile delivery market. The town’s proximity to densely populated areas makes it an ideal location for last-mile warehouses, facilitating the efficient delivery of goods ranging from on-demand luxury clothing rentals to fresh groceries.
Recently, several properties in Parsippany have been approved for warehouses, including:
- 20 Lanidex Plaza
- 3 Century Drive
- 249 Pomeroy Road
- 299 Jefferson Road
- 7 Campus Drive
The office market has faced significant challenges, with high vacancy rates and fluctuating demand. As of the second quarter of 2024, the overall availability rate for office space in the U.S. has stabilized at 23.7%, which includes a 20% direct availability rate and a 3.7% sublet availability rate. This marks a slight increase from the previous year, indicating persistent challenges in the market.
