Warehouse supply rises but still can't match urban demand

Warehousing

Logistics / Warehousing 479 Views

Dive Brief:

  • More than 2,000 new establishments classified as either warehouse or storage have been added to the U.S. market since 2008, according to numbers from the Bureau of Labor Statistics (BLS).
  • This growth has not been enough to keep pace with the increase in demand for these types of industrial real estate spaces. Demand has outpaced supply of warehouse space since 2010, according to CBRE.
  • The location companies want to build these new logistics facilities is typically dense and urban, which complicates the process and slows development, David Egan, CBRE's head of industrial and logistics research, told Supply Chain Dive in an interview.

Dive Insight:

The trend toward online shopping is driving this need for more warehouse space. Retail sales made online in the third quarter of 2018 totaled more than $130 billion, representing an increase of 14.5% from the same quarter in 2017, according to the Department of Commerce. Forrester Research expects the annual total for online retail sales to surpass $712 billion by 2022, according to Retail Dive.

"We’ve got a consumption culture that is consuming more than it ever has before," Egan said. "And so the stuff that we’re consuming — food and durable good and all the stuff we buy — it ends up in warehouses along the way" and often will make multiple stops in multiple warehouses along the way......

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