The Friday Report: January 15th, 2021

Quick wrap up of a few hot topic newsworthy stories in the supply chain logistics industry

American Trucking Industry Braces for Year of Transition

With the global coronavirus pandemic continuing to rage on, experts anticipate that what may have started out as a temporary fix may now become established patterns.  Consumers have become comfortable ordering online and retail sales have been strong.  Carriers have had to significantly shift both lanes and capacity to accommodate the new patterns as capacity and demand are not moving normally.

Many shippers are planning for the freight industry to normalize in Q2 this year. Q3 saw strong signs of economic recovery yet much depends upon the availability of COVID vaccines and the willingness of the public to take them.  Even as this happens, however, the trucking industry faces a reckoning with outdated processes, driver capacity restrains and other issues which need to be resolved.

The American Southeast is the New Hot Spot for Industrial Warehouse Space               

As the industrial supply of new warehouses hits the market, it is expected that warehouse rent escalation will slow.  Warehouse rents went up the most in the Northeast.  In Q4 of 2020, 360.7 million square feet of warehouse space was under construction.  94% of the warehouse space under construction was intended for warehouse and distribution use.

The Southern United States has the most square footage of warehouse space under construction.  This area of the U.S., the American Southeast and Gulf Coast, is the most highly focused on developing China +1 strategies. This region tends to be drawn toward sourcing in Europe and parts of Asia which can access the U.S. the fastest via the Suez Canal.  In the first quarter of 2020, the Southeast region with the fastest growing industrial real estate market was Savanna, Georgia, Charleston, South Carolina and Greenville, South Carolina.

This area of the Southeast is thriving and is a significant population hub with a nearly unquenchable thirst for goods.   The region can provide plenty of available land for manufacturing development and logistics with lower asking rents and access to an area of major population concentration.

Abnormal 2020 Supply Chain Risks and Disruptions

Supply chains in 2020 experienced risks and disruptions beyond the norm.  Here are some of the risks encountered in 2020:

  • Worldwide theft of medical supplies, especially in the Middle East and Africa
  • Escalation in warehouse and facility theft most notably in Europe                                                          
  • New Warehouse Spec Development Construction Complete
  • Food and beverage products were the most frequently stolen commodities in Asia
  • Cargo theft most frequently occurred in warehouse facilities in Europe
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