Storage space has split into two prices, and the $3.79-a-pallet gap now sets the fill rate — the share of order lines a site can ship complete [2].

The gap widened because the two ends of the market stopped moving together. Logistics firms placed cut-price bids that pulled the cheap end down, while scarce space in tight cities pushed the dear end up [2]. That spread was $1.06 in July, so it has widened 3.6 times since [2].

For anyone responsible for a fill rate, the problem has changed. A fill rate depends on stock already sitting in the right building. Adding stock at a site that just repriced upward makes the promise more expensive without making it easier to keep.

At a glance

  • The shift: Committed warehouse space is shrinking and repricing up; short-term space is plentiful but uneven.
  • The number: 3.6× — the September gap between cheap and dear pallet rates.
  • The risk: A fill target at the same site pays the fastest-rising cost.

Committed space is the scarce kind

The two reports cover the same three months. Flexe published its market report on October 21 [2]. The Logistics Managers’ Index (LMI) followed on November 3 with its October survey [1].

Five universities run the index with the Council of Supply Chain Management Professionals (CSCMP). It polls supply chain managers each month. Its readings are diffusion scores: above 50 means growth, below 50 means falling, so they show direction and speed, not size [1].

Stock levels jumped to 66.9, the fastest growth since September 2022 [1]. Stock costs climbed to their highest reading since March 2022 [1]. Neither move is a surprise in a quarter when buyers pulled goods forward. Warehouse space shrank again, the sixth shrinking month in nine this year [1].

Inside that space reading sits the part that matters for service. Upstream firms, the suppliers and manufacturers, read 37.5; downstream firms, the retailers and distributors, read 50.0, which means no change at all [1]. Smaller firms scored 40.0 against 48.3 for larger ones. The space that is going sits on the factory side of the chain, not at the retailer that already owns its sheds. That is where stock waits for the line, not where it waits for the order.

The LMI names the cause plainly [1]. Firms are “pulling inventories in as quickly as they can — often at high costs”. They expect a strong holiday season and want goods already on hand. Stock that lands early has to sit somewhere until the season starts.

Flexe’s quarterly price table reads the same shift, market by market [2]:

Market Short-term price, September Change in the quarter
National index $14.14 a pallet +2.7%
Dallas $10.97 a pallet -9.2%
Lehigh Valley $11.33 a pallet +6.4%

New supply behind those prices is still arriving. Builders finished almost 75 million square feet in the quarter [2]. They started another 88 million, the most since mid-2023 [3]. The country is not short of sheds. It is short of sheds where the order is.

What I keep circling is that the two documents do not disagree. One prices the contract, the other prices the week. Storage prices in the LMI survey rose to 80.7, the fastest since May 2022 [1]. The national short-term index barely moved over the quarter, and four overbuilt cities fell outright [2].

By the numbers

  • 88.8 on the stock-cost index: Costs of holding stock in October, the highest since March 2022 [1].
  • 38.0 on the transport index: Truck and rail capacity contracted again, the harder half of the squeeze [1].
  • 75 million square feet: New warehouse space finished in the third quarter [2].

Where the local market sits

Nine of the 21 markets Flexe tracks are rated Buyer’s, meaning renters hold the pricing edge. Six are Neutral and six are Seller’s, where landlords do [2]. Eight changed rating in the quarter, so the local answer to whether a shipper can find space near its customers now moves faster than the national one [2].

Flexe’s demand intensity reading, a measure of how hard renters are competing for space, rose from 30 to 38 as imports held up [2]. The leverage buyers gained over the summer is already narrowing.

The same release says shippers are still bringing goods in but avoiding long contracts [3]. CoStar expects vacancy to peak early in 2027, so the leverage may not last [3]. That is a window with a closing date on it. Local ratings move first, and they move on leases that are still being signed.

What I’m watching is whether the buyers who rented flexibility this quarter turn it into a network shape before the leverage goes.

The catch

The honest limit is that the two numbers describe different things. One is a survey of whether buyers’ own costs rose last month [1]. The other is what short-term space actually cleared for in 21 markets [2]. Both can be right, and neither proves the other wrong.

The publisher has an interest too. Flexe sells access to the market whose prices it indexes, so its report is a seller describing its own market, even where the data is plainly measured [2].

The index cannot price a practical gap, though. Space a shipper can rent in a fortnight is not by itself a building that can ship an order complete in the same fortnight. A cheap pallet is not the same asset as a dependable one. What I find hard to square is that one quarter produced both the cheapest space in years in some cities and the fastest-rising storage costs in the survey. Both are true; the difference is the contract a shipper signs.

The open question is whether sites get picked before the vacancy window closes in early 2027. The stock-saving math in fewer, better-placed warehouses halve stock only lands if the site is chosen first.

Related reading

Sources