The expanded Panama Canal and higher fuel costs will boost demand for U.S. warehouses and distribution centers, a new report says.
The report by industrial real estate specialist Jones Lang LaSalle said escalating fuel costs and slow-steaming by carriers “will result in a slower supply chain and the need for a larger amount of products stored on land.”
“Manufacturers and retailers must store merchandise longer to keep inventories buoyant, and this will increase demand for warehouse and storage space near ports,” said John Carver, head of Jones Lang LaSalle’s ports, airports and global infrastructure group.
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In addition, the opening of larger locks at Panama in 2014 will increase competition among ports and encourage cargo interests to spread shipments among multiple ports, the report said, a trend that picked up speed after the 2002 longshoremen’s lockout that closed West Coast ports.