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U.S. Trucking Shortage Elevates Importance of Property Supply Chain Infrastructure

U.S. Trucking Shortage Elevates Importance of Property Supply Chain Infrastructure

Commercial News » United States Edition | By Michael Gerrity | December 1, 2014 10:00 AM ET



With the holiday shopping season now in full-swing, real estate supply chain management is more crucial than ever, and U.S. markets with intermodal infrastructure are now best positioned for industrial space growth.
 
According to a new report by CBRE, the U.S. industrial real estate market expansion has been driven, in part, by the ongoing evolution of supply chains, as businesses seek to distribute goods across the country ever more quickly and efficiently. However, a nationwide shortage of truck drivers poses a risk to existing distribution chain strategies and elevates the importance of real estate in supply chain structures.
 
Total-Supply-Chain-Costs.jpgWhile trucking plays a large role in the distribution of goods across a supply chain, the higher costs stemming from a shortage of truck drivers is spurring users to find other options for transport over land. Rail is an obvious and very cost-effective choice. Demand for warehouse and distribution space in markets that feature a significant intermodal component has been a strong indicator that users are choosing access to the rail network as a solution to some portion of their long-haul transportation needs.
 
CBRE projects that distribution markets with significant intermodal facilities--the Inland Empire, Indianapolis, Baltimore, Dallas/Ft. Worth, Orlando, New Jersey Central, Portland, San Antonio, Virginia Northern and Houston--will grow their inventory of industrial space most quickly over the next 12 months. Much of the new construction in these markets is on or near intermodal pathways, largely to take advantage of the link that rail lines provide to ports and major distribution hubs.
 
"Rising transportation costs, particularly those associated with trucking, are forcing supply chain users--manufacturers, importers, and exporters--to devise blends of warehouses and distribution centers that will most efficiently service the need for port access while enabling quick delivery to end users in densely populated metropolitan areas," said Scott Marshall, Executive Managing Director, Industrial Services, The Americas, CBRE.


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