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Small Warehouses Hard to Find; Chinese Suppliers Brace for Tariffs By Liz Young

Note to readers: The Logistics Report newsletter won't be published Monday, Feb. 17, in observance of Presidents Day. Look for us back in your inbox next Tuesday.

Half Price Books has been looking for a new warehouse in Minnesota for more than a year without luck. The problem: The used-books seller needs too little space.

The WSJ Logistics Report writes that a growing number of businesses are struggling to find small warehouses to lease, even after years of frenzied warehouse development driven by surging e-commerce demand and a more recent rise in overall availability of space as consumer spending cooled.

One part of the problem is that developers have focused over the past five years on constructing bigger buildings to accommodate growing e-commerce operations. Smaller warehouses have been less desirable to build in part because they are often in urban and suburban areas where space is tight and land is expensive.

Flexe, which connects businesses to warehouses with extra storage space, said some companies are searching for smaller buildings in part to help keep costs down.

E-commerce fulfillment provider ShipBob said companies are also looking to spread inventory across multiple smaller warehouses to store goods closer to customers, speed up delivery and cut shipping costs rather than stashing goods at one big, central building.

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Supply Chain Strategies

China's e-commerce industry is reeling after President Trump's sudden, temporary suspension last week of a popular trade exemption that lets companies avoid import duties and customs inspections on low-value packages.

The WSJ's Shen Lu, Raffaele Huang and Esther Fung report that even though Trump reinstated the de minimis treatment for shipments from China, industry players are bracing for the anticipated eventual loss of the duty-free provision and are forging ahead with alternate plans.

Bargain fashion giant Shein is encouraging suppliers to set up production in Vietnam. Discount seller Temu is raising prices on its website and pushing suppliers to store inventory in the U.S.

Some Chinese suppliers are reconsidering ways to do business with the platforms. One Temu seller is renting a small warehouse in Los Angeles, while a garment factory owner is stopping supplying Temu and Shein because of low margins and the risk of being stuck with unsold inventory.

Quotable Number of the Day In Other News

U.S. initial jobless claims fell to 213,000 last week. (WSJ)

The U.K. economy grew only slightly at the end of last year . (WSJ)

President Trump directed federal agencies to study how to adjust tariff rates to match the duties and economic barriers enforced by other nations. (WSJ)

The International Energy Agency modestly raised its forecast for global oil-demand growth. (WSJ)

Russia's revenue from the export of crude and other oil products rose last month despite Western sanctions. (Dow Jones Newswires)

Honda and Nissan scrapped their planned merger . (WSJ)

The CEO of aluminum maker South32 said he expects American consumers to bear the cost of planned tariffs on aluminum shipments. (WSJ)

German industrial conglomerate Siemens posted a profit increase in the most recent quarter that beat market expectations. (WSJ)

Nestle reported its weakest annual organic sales growth in more than a quarter of a century. (WSJ)

Sony raised its annual earnings projections after reporting higher profit in the most recent quarter. (WSJ)

GXO Logistics posted profit of $100 million for the fourth quarter , up from $73 million a year earlier. (Transport Topics)

Taiwan's Evergreen Marine signed two deals for the order of 11 megaships capable of sailing on liquefied natural gas. (Journal of Commerce)

The aircraft carrier USS Harry S. Truman collided with a large merchant vessel in the Mediterranean Sea. (gCaptain)

Amazon is banning the sale of car number plates on its platform after reports the products were illegally supplied. $(BBC.AU)$

Amazon opened a beauty and health products store in Milan, Italy. (CNBC)

Apptronik, a developer of humanoid robots, raised $350 million in Series A funding. (Axios)

Executive Insights

Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.

More accounting firms are adding chief growth officers to their ranks as smaller players aim to stay competitive amid fast-paced expansion and dealmaking in the traditionally staid industry. The SEC, now under Republican control, is making it easier for companies to shoot down shareholder proposals on hot-button political issues. Silicon Valley investors remain optimistic that AI can deliver trillions of dollars in business value, even as they agree that the technology has continued to feed a now yearslong hype cycle. Private-equity firms continue to pitch first-time funds despite a tough market environment. About Us

Follow the WSJ Logistics Report team: @bylizyoung and @pdberger . Follow the WSJ Logistics Report on X at @WSJLogistics .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

February 14, 2025 07:03 ET (12:03 GMT)

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