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Whether on U.S. East or West Coast, Companies Want DCs Near 'Megapolitan' Areas, Report Says

Companies are heavily scrutinizing transportation costs in East Coast and West Coast seaports-and inland cities with strong transportation links-locating facilities in markets best able to serve established and emerging "megapolitan" areas in a quick, cost-effective manner, according to a report from CBRE Group entitled Transportation Cost Equivalence Line: East Coast vs. West Coast Ports.

The report makes it clear that to maximize supply chain efficiency, distribution center locations that are within close proximity to U.S. population clusters and multimodal transportation are crucial. The report suggests that firms should first determine the optimal location based on their outbound requirement (buyers, people and retail locations) and then place their facilities as close as possible to transportation infrastructure based on their inbound requirements (cargo port, inland ports and rail).

“Future location decisions will largely be driven based on population growth—the East Coast and West Coast ports with the infrastructure and transportation links to serve the largest and fastest-growing regions in the country will also be home to strong-performing industrial real estate markets,” said Scott Marshall, executive managing director, Industrial Services, Americas, CBRE.

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