Skip to content
Search AI Powered

Latest Stories

Warehouse utilization returns to pre-pandemic levels

Strong demand for warehouse space drives rebound in logistics real estate market, industry firm says.

Outlook calls for sustained growth in warehousing real estate

The logistics real estate market is experiencing a fast return to growth, driven by strong demand for space that is expected to continue, according to data from logistics real estate firm Prologis, released this week.

In their latest Industrial Business Indicator (IBI) report, researchers said the segment returned to strong growth in the third quarter following a volatile second quarter. Vacancy remained at a low rate of 5% and warehouse utilization returned to pre-pandemic levels, at 85%. The report also predicts 2020 rent growth of 2.5%. 


Prologis surveyed its U.S. customer base to gauge warehousing activity levels nationwide.

Improving confidence and the industry’s ability to “coexist” with Covid-19 are helping to boost demand, as is accelerating e-commerce activity and the need for higher inventory levels throughout the supply chain, according to the report. As an example, both e-commerce-driven leasing and activity among third-party logistics services (3PL) providers remained above pre-pandemic levels in the third quarter, researchers said.

Melinda McLaughlin, head of Prologis’ U.S. research practice, emphasized those points in a presentation at this week’s Home Delivery World conference, which is being held online. She said competition for available space is heating up and noted that a shift in inventory levels could lead to a shortage of space in the coming year. The Prologis report notes that rebounding activity and a falling supply pipeline “could lead to a critical shortage of space in early 2021.” 

Prologis’ Chief Customer Officer Mike Curless, who also spoke at the Home Delivery World event, added that construction of new warehousing space had slowed at the height of the pandemic and that there may be a shortage of “quality distribution space” in 2021. He said Prologis halted the construction of its 16 speculative building projects for 2020 in the second quarter, but has since resumed work on two-thirds of them. The firm continued work on the 32 build-to-suit projects it had going at the start of the pandemic, however.

Careful planning for logistics operations is the best strategy heading into 2021, they said.

“The contraction in the development pipeline means that available options for customers looking to expand could narrow quickly, particularly in locations with high barriers to new supply,” the researchers wrote. “Perhaps, more than ever, planning well in advance for logistics needs could become a source of competitive advantage.”

The Latest

Artificial Intelligence

AI: Is it the real deal?

More Stories

Logistics economy picked up speed in January

Logistics Managers' Index

Logistics economy picked up speed in January

Economic activity in the logistics industry expanded in January, growing at its fastest clip in more than two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.

The LMI jumped nearly five points from December to a reading of 62, reflecting continued steady growth in the U.S. economy along with faster-than-expected inventory growth across the sector as retailers, wholesalers, and manufacturers attempted to manage the uncertainty of tariffs and a changing regulatory environment. The January reading represented the fastest rate of expansion since June 2022, the LMI researchers said.

Keep ReadingShow less

Featured

Disrupting the furniture supply chain: An interview with Jay Rogers

Disrupting the furniture supply chain: An interview with Jay Rogers

As commodities go, furniture presents its share of manufacturing and distribution challenges. For one thing, it's bulky. Second, its main components—wood and cloth—are easily damaged in transit. Third, much of it is manufactured overseas, making for some very long supply chains with all the associated risks. And finally, completed pieces can sit on the showroom floor for weeks or months, tying up inventory dollars and valuable retail space.

In other words, the furniture market is ripe for disruption. And John "Jay" Rogers wants to be the catalyst. In 2022, he cofounded a company that takes a whole new approach to furniture manufacturing—one that leverages the power of 3D printing and robotics. Rogers serves as CEO of that company, Haddy, which essentially aims to transform how furniture—and all elements of the "built environment"—are designed, manufactured, distributed, and, ultimately, recycled.

Keep ReadingShow less
chart of GenAI effect on workforce

Gartner: GenAI tools create anxiety among employees

Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.

That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.

Keep ReadingShow less
warehouse worker driving forklift between racks

German 3PL Arvato acquires two U.S. logistics firms

The German third party logistics provider (3PL) Arvato this week acquired the U.S.-headquartered companies Carbel LLC and United Customs Services, saying the move would grow its client base, particularly in the fashion, beauty, and lifestyle segments.

According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.

Keep ReadingShow less
photo collage of warehouse tech

Supply chain pros are wary of inflation and labor woes

The top worries that supply chain leaders hope to address with new innovations this year include inflationary concerns (68%) and labor shortages (50%), according to a survey on innovation from the third-party logistics provider (3PL) Kenco.

And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.

Keep ReadingShow less