Warehousing and Storage Services NAICS 4931

Oct 24, 2025 - Amazon Plans For Massive Shift to Warehouse Automation

• Amazon is accelerating automation across its warehouse network, aiming to replace or avoid hiring more than 500,000 US workers through robotics over the next few years, according to internal documents viewed by The New York Times. Amazon’s goal is to automate up to 75% of its operations, potentially eliminating the need for 160,000 new hires by 2027 and saving about 30 cents per item processed. The company’s US workforce has tripled since 2018 to nearly 1.2 million, but executives hope automation will allow future growth in sales - projected to double by 2033 - without proportional staffing increases. The shift could reshape the warehousing industry, making roles more technical but far fewer. Experts warn Amazon’s strategy could transform it from a job creator into a job reducer, influencing other large employers like Walmart and UPS. Amazon maintains that automation will ultimately spur new types of employment and community investment.
• The average US warehouse vacancy rate grew to 7.1% in Q2 2025 (up from 6.9% in Q1) as companies delay leasing space because of the uncertainty brought on by the US trade war, according to real estate services firm Cushman & Wakefield. It marks the highest vacancy rate in the warehouse industry in 11 years. Early in the year companies ranging from retailers, manufacturers, and wholesalers stockpiled inventory in preparation for Trump tariffs, and then pulled back on new overseas orders and leasing decisions as the levies became a reality. It continues a three-year downturn in an industry that saw massive expansion during the pandemic when e-commerce exploded, but has now cooled off with low-demand for too many facilities. The 225 million square feet of available US warehouse space in Q2 was a record high, a 25% year over year increase.

• Warehousing and storage service industry revenue increased by 7.9% year over year in Q4 2024 to about $15.3 billion, according to the US Bureau of Labor Statistics. Several industry trends have allowed warehousing companies to increase offerings and thereby increase revenues. A boom of e-commerce shopping brought on by the pandemic has increased demand for last-mile delivery services and the geographically broad storage needs of retailers. The pandemic has also spurred suppliers to increase inventory levels to boost flexibility to supply chain disruptions. Technologically, use of automation, robotics, and AI is driving efficiencies and allowing warehousers to handle more volume and increase capacity. The growth of specialty storage needs, such as refrigerated warehouses for pharmaceuticals and frozen foods are infusing the industry with new, high-priced services. And as industrial land becomes more expensive to build on, the warehousing industry is increasingly passing those costs on to customers.
• Warehouse tenants who signed leases at high premiums during the pandemic have found that prices are not coming down - and in some cases are actually rising - when they attempt to renew expiring contracts. According to real estate firm Cushman & Wakefield, the average rent for warehouse space in the US was $10.13 per square foot in Q4 2024. That cost is a 4.5% jump from 2023 and a whopping 61% rise since the end of 2019, just before the pandemic-induced e-commerce boom. Since then, demand has slowed and prices should theoretically come down, but rents remain high from a lack of new warehouse construction due to high interest rates. Warehouse vacancy rates were 6.7% in Q4 2024 vs. 3% in 2022, and with a 31% drop in new space constructed in 2024, empty warehouse space remains at a premium.