What Happened in Warehousing in 2025? Soft Capacity, Tariff Whiplash, and a Q4 Crunch
PopCapacity Research Team | March 2026
The warehousing market in 2025 was a story of patience followed by a late year sprint. For nine months, capacity sat wide open across PopCapacity's network of over 2,250 facilities and nearly 474 million square feet. Utilization hovered between 64% and 78% from January through September, with available space never falling below 22% of the network. Shippers had leverage, and warehouses were competing for volume.
Then Q4 flipped the script. Utilization surged from 78% in September to 91% in December, compressing available capacity to just 9%. It was a real crunch, but the data confirms it was seasonal rather than structural. By January 2026, the market had already loosened back up.
Access the full index here ➡️ PopPulse FY2025 3PL Warehouse Index
Tariff Whiplash and the Rise of FTZ Capacity
Much of the year's softness was driven not by weak demand but by tariff uncertainty. Shifting federal trade policies created a frustrating cycle the industry came to call "tariff whiplash." Shippers would initiate warehouse searches, get close to committing, and then pause when new guidance landed. Search volumes stayed healthy, but conversion to confirmed placements lagged well behind historical norms.
In direct response, warehouses across the network moved aggressively to add Foreign Trade Zone and Bonded certifications, positioning themselves to serve importers seeking duty deferral and customs flexibility. That expansion is a structural positive heading into 2026, giving shippers and operators more tools to navigate an evolving trade environment.
Rates and Regional Trends
Average storage rates landed at $18.58 per pallet for the full year, though monthly averages ranged from $15.56 in October to $21.63 in September. Handling in rates averaged $9.55 per pallet, handling out averaged $10.36 per pallet, and general labor held relatively steady at $40.68 per hour.
Regionally, the Southeast and Northeast accounted for 58% of total demand. The standout story was the Southwest, which posted 18.9% year over year growth driven by nearshoring activity along the U.S. and Mexico border. The Midwest was the only region to contract at negative 2.3%, reflecting its heavier exposure to tariff sensitive manufacturing supply chains.
What to Watch in 2026
Early signals are cautiously encouraging. Q1 2026 project volume is tracking in line with the prior year, but roughly 10% more projects have moved to close, a meaningful shift from the hesitation that defined 2025. Nearshoring and reshoring trends continue to push freight toward Gulf Coast and East Coast corridors, with new warehousing demand rising in Georgia and Texas. The tariff landscape remains fluid, but FTZ and Bonded capacity positions the market well regardless of which direction policy moves next.
The full PopPulse FY2025 Data Index is available now with complete monthly breakdowns, regional analysis, and rate data. Access the full index here ➡️ PopPulse FY2025 3PL Warehouse Index