- The Delivery Protection Act would require warehouse operators to directly employ workers and obtain operating licenses, disrupting the third-party logistics model used by major delivery networks.
- Industrial owners and logistics firms say the proposal could force warehouse closures, reduce leasing demand, and shift jobs and operations outside New York City.
- The legislation adds to mounting regulatory pressure that has already slowed industrial development and clouded investment decisions across the city’s warehouse market.
New York City’s industrial market faces another potential policy hurdle as the City Council considers legislation that warehouse owners say could reshape last-mile logistics across the five boroughs, per Bisnow.
The proposed Delivery Protection Act would require warehouse operators to directly employ workers instead of relying on third-party logistics providers. Industry groups argue the changes could reduce leasing demand, encourage relocations, and add fresh uncertainty to a market already navigating tighter development rules.
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Delivery Protection Act Adds Pressure
The Delivery Protection Act first surfaced in late 2025 and returned to the City Council this spring. The proposal remains in committee, but warehouse owners, developers, and logistics firms say its potential impact is already influencing business decisions. Supporters say the bill would improve worker safety through mandatory training, require operating licenses, and increase oversight of warehouse operators. Opponents argue it targets the business model widely used for last-mile delivery, particularly by companies serving large e-commerce platforms such as Amazon.
The Details
The legislation introduces three primary requirements. Warehouse operators would need to hire workers directly instead of relying on contracted delivery providers. Companies would also complete mandatory worker training and obtain a $500 operating license every two years.
According to planning and engineering consultancy AKRF, the proposal could trigger warehouse consolidations, facility closures, and relocations beyond city limits. The firm estimates between 3,000 and 10,000 jobs could be affected. AKRF also found that every 1,000 warehouse jobs generate roughly $11.7M in tax revenue.
Third-party logistics companies appear especially vulnerable. Logistics Xpress CEO Bashar Yazgi told Bisnow the bill could force his Bronx warehouse to close, eliminating roughly 70% of his workforce after less than three years in business.
NYC Industrial Market Faces New Headwinds
The proposal arrives as New York City’s industrial sector already contends with regulatory challenges. According to CBRE, third-party logistics firms and wholesalers fueled much of the city’s industrial leasing activity during the fourth quarter of 2025. Losing those tenants would leave a meaningful gap in demand, even if other warehouse users remain active.
Developers also point to the city’s 2024 warehouse permitting rules as another obstacle. According to CBRE, developers have not started construction on a new warehouse since those regulations took effect. The development pipeline has fallen 69% to 467K SF. JLL also reported industrial construction reached its lowest level since 2019 by the end of the first quarter.
Why It Matters
For landlords, the concern extends beyond a single bill. Industrial owners say prolonged regulatory uncertainty makes it harder to justify new investments or long-term leasing strategies. AKRF reported that several landlords, logistics firms, and major carriers have already delayed expansions, modernization projects, or leasing decisions while evaluating the legislation’s potential impact.
Some developers are also expanding their focus outside the city. Turnbridge Equities told Bisnow it has explored projects in New Jersey, Westchester, and Long Island as policy changes make development inside New York increasingly difficult. Prologis also warned the City Council that weaker tenant demand could reduce future investment across its 1.2M SF New York portfolio.
What’s Next
The Delivery Protection Act remains under committee review, leaving warehouse owners and tenants waiting for greater clarity. Even without a final vote, many companies are already evaluating contingency plans beyond the five boroughs, according to AKRF.
The outcome could influence more than warehouse employment. If logistics providers reduce their New York footprint, landlords may face softer leasing demand, developers could further scale back new projects, and industrial investment may continue shifting to nearby markets with fewer regulatory hurdles. For a market already constrained by limited industrial supply, the next policy decision could have lasting consequences.
