Bill Targeting Third-Party Logistics Risks Upending NYC Industrial Market

Bashar Yazgi, the CEO and founder of Logistics Xpress, says a bill being considered by the New York City Council would force him to shutter his Bronx warehouse and cut 70% of his staff.

The legislation, known as the Delivery Protection Act, would require companies leasing warehouse space to directly employ their workers and to obtain operating licenses — targeting the third-party logistics business model used by Amazon.

“This would obviously put us out of business, something that we put our blood, sweat and tears, spent our money, our life savings in,” said Yazgi, who founded his third-party logistics company almost three years ago to fulfill Amazon e-commerce orders. “We live and we die by the contract, so we have no contract, we have no income.”

The Delivery Protection Act, widely believed to be targeting Amazon, was proposed by City Council Member Tiffany Cabán last fall and reintroduced this spring. But while the bill has been stuck in committee since April, industrial owners and developers say it still poses a danger to their ability to do business in the city.

The legislation introduces three changes to the way that companies leasing warehouse space operate. First, it would force companies to hire warehouse workers directly rather than contracting last-mile delivery services to third parties. It also aims to reduce workplace injury and driver crash rates through mandatory training, and it would require warehouse operators to spend $500 on operating licenses every two years.

Those measures would have sprawling unintended consequences, according to a report from planning and engineering consultancy AKRF.

The requirements to directly hire workers and obtain licenses would result in firms consolidating or closing delivery stations, reducing coverage areas, and relocating outside of city limits, threatening between 3,000 and 10,000 jobs, according to AKRF. Every thousand warehouse jobs supports approximately $11.7M in tax revenue, the report says. 

The most immediate impact would hit third-party logistics providers who subcontract with giants like Amazon and FedEx for the last leg of the relay between warehouses and customers’ homes, landlords and third-party logistics companies told Bisnow. 

Although Logistics Xpress recently opened a second facility in New Jersey, there is no guarantee it could get the same contracts across the river even if it managed to move all of its operations outside of city limits, Yagzi said.

“I don't get to choose that. That’s a decision Amazon makes,” Yagzi said. “If Amazon decides to move its operation outside the five boroughs, who's to say that there are going to be opportunities for us to go there? Who's to say that their business model [is] going to stay the same?”

The proposed legislation would push many third-party logistics firms to move their operations elsewhere, Manhattan Chamber of Commerce President and CEO Jessica Walker said.

Amazon didn’t respond to a request for comment but told the New York Post in April that the bill would “force us to consider relocating delivery operations outside of the city.”

An executive with San Francisco-based Prologis, the world’s largest industrial real estate firm, with $235B of assets under management and a 1.2M SF NYC footprint, said in testimony to the city council in April that the Delivery Protection Act would reduce operator demand and undermine its plans for growth in the five boroughs.

“If operators begin to exit the market or decline to renew leases, that investment is unlikely to materialize,” Prologis Senior Vice President for Value Added Investments Jeremiah Kane said.

NYC’s industrial facilities have a more diverse pool of tenants than elsewhere in the country, landlords told Bisnow. Other tenant types include delivery hubs serving grocery stores and bodegas, alcohol wholesalers, UPS, home goods companies and companies that provide city vehicles like school buses.

While owners said the Delivery Protection Act wouldn’t be a death knell, it would leave massive gaps in the market. Demand from third-party logistics companies and wholesalers was the main driver of NYC industrial leasing in the final quarter of 2025, according to CBRE. 

“I could see 3PLs leaving the city,” said Jane Finkenstaedt, vice president of leasing for Seagis Property Group. “There are other tenants to pull from, but obviously, 3PLs are a part of the fabric of logistics in New York City. It would absolutely be a loss.”

Regulatory uncertainty in the city has already affected investment behavior, with landlords and tenants delaying leasing, expansion and modernization in NYC facilities, according to AKRF, which interviewed more than a dozen last-mile stakeholders, including major carriers, logistics firms and industrial landlords.

Some of those stakeholders are already looking at contingency plans outside of the city, according to AKRF.

Tenants in some of the 61 properties that Seagis has in its portfolio are already considering moving to properties outside of the five boroughs, Finkenstaedt said.

Turnbridge Equities, one of the city's most active industrial developers, has explored developing in New Jersey, Westchester and Long Island since the city council passed a bill in 2024 requiring special permits for new warehouse construction, Managing Principal Ryan Nelson told Bisnow.

The bill has been great for owners of existing industrial facilities, he said, but has otherwise “completely chilled” new construction. Developers haven't broken ground on a single new warehouse since last year, reducing the construction pipeline by 69% to 467K SF, according to CBRE.

By the end of the first quarter, industrial construction activity was at its lowest level since 2019, according to JLL. 

“It's just been opaque,” Nelson said. “No one knew what would happen or when it would happen, and so you can't go invest millions and millions or hundreds of millions of dollars.”

Between the Delivery Protection Act and the construction permit rule, the city is sending a pointed message to owners, he said. Sooner or later, owners might send one of their own.

“If the city's anti-business, why do business in it?” Nelson said. “There's way more places that are better in the United States to make money and that are welcoming businesses.”