E-commerce created by retail giants like Amazon and others has been driving growth in many sectors that support it. Now the huge amount of business being done on line is starting to have an impact on the amount of warehouse space that is needed across the country.
Recently, a trend has been developing in the logistics sector that has industry experts taking notice. Warehouse space keeps getting harder to find as the drive toward online retail sales pushes more goods into already-squeezed U.S. distribution centers.
There is less industrial space available now than there was just a short time ago. According to the real estate brokerage firm, CBRE Group Inc, the availability of industrial property declined in the third quarter as nearly 50 million square feet of warehousing capacity came onto the U.S. market in the three-month period. It seems that Distribution and e-commerce fulfillment operations are moving into new space just as quickly as it is being built which is causing things to get a tighter.
But it’s not all just due to E-commerce, people still have to buy all those things that are being sold on these sites, and that means people have money. The growth in E-commerce probably couldn’t happen without a really strong consumer economy.
The high demand comes as companies have been pushing more goods through distribution networks this fall to get inventory in place for the busy holiday shipping season.
Another factor that may be impacting the surge may have something to due with impending tariffs may have prompted importers to place their holiday orders early, driving higher volumes in the earlier summer months. But even with 10% levies now on roughly half of retailer imports from China, NRF estimates inbound volumes will continue to grow through the end of the year.
It’s always good to have a strong economy but there are sometimes where there can be too much of a good thing.