Not only shipping costs, but also US inventory costs will increase?

As consumers and sellers worry about shortages of goods during the holiday shopping season, U.S. warehouses are also experiencing shortages.

With the arrival of a series of online shopping festivals, the vacancy rate of logistics distribution centers across the United States has hit a record low, and there is a shortage in the warehouse industry . According to data from commercial real estate services company JLL, nearly 96% of existing industrial space is in use. In areas close to ports such as Southern California, the vacancy rate of warehouses is only 1% or even lower. JLL estimates that by 2025, the United States may need an additional 1 billion square feet ( nearly 100 million square meters) of new industrial space to meet demand.

Warehouse rents are also at an all-time high, with rents soaring by more than 30% in some hot markets in the U.S. At the same time, warehouse pre-leasing rates have soared, with many warehouses being rented out before construction is completed .

According to real estate investment and services company CBRE, nearly 190 million square feet of warehouse space was under construction in North America during 2020, of which more than 43% was pre-leased. "In some cases, leasing volume is almost three times the annual construction volume," said JLL Americas executive .

“The entire industry is sold out for the next year, ” said Chris Caton, managing director of global strategy and analytics at logistics facility provider Prologis.

This demand is caused by the rapid development of e-commerce , which requires more warehouse space than traditional retail. E -commerce and logistics occupy three times the space of physical retail. CBRE estimates that every $1 billion increase in online sales means an additional 1 million square feet of warehouse space is needed.

At the same time, e-commerce consumers want faster delivery, which also makes e-commerce operators invest in building more warehouses. In order to mitigate the impact of future supply chain shocks, such as the supply chain disruptions caused by the epidemic , retailers are also striving for more storage space in the United States to ensure inventory .

In contrast to the fast-growing demand, warehouse construction has been hampered by delayed shipments of building materials needed to build warehouses due to supply chain impacts, and the pace of warehouse construction has been unable to keep up with the rapid development of e-commerce. According to the new forecast, already strained warehouse capacity will face further pressure and is unlikely to ease before 2023.

UPS CEO predicts businesses will spend more money on inventory.

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