Michael Murphy, Chief Development Officer, CenterPoint Properties

Michael Murphy, Chief Development Officer, CenterPoint Properties

The US industrial market is undergoing tremendous change. The following emerging trends are driving this transformation and most impacting our business:

E-commerce: E-commerce has been and will continue to be the dominant trend for the foreseeable future. Increased volumes and faster delivery require a comprehensive supply chain from import facilities to fulfillment and sortation centers to last-mile depots. This is requiring developers and investors to understand the needs of e-commerce vendors and provide new solutions to meet the delivery expectations of the consumer.

Intermodal: The inherent efficiencies of rail continue to drive the conversion from long-haul truck to rail, increasing the demand for industrial facilities near established trade lane centers such as Los Angeles and Chicago. Additionally, increased import volumes at East and Gulf Coast ports are leading to additional infrastructure needs and new facilities.

Mega-ships: Larger ships are increasing both the overall and “at-once” volumes at ports throughout the US, driving the need for enhanced infrastructure and more efficient distribution facilities.

Panama Canal: Improvements to the Panama Canal (as well as the Suez), have made the all-water route from Asia to the US East and Gulf Coast more efficient, driving increased port volumes and more demand for distribution facilities in these markets.

Energy: Advancements in drilling have made natural gas cheap and abundant, which has dramatically lowered US plastic resin producers’ cost structure. This should enable the US to go from a net importer to a net exporter of plastic resins and create the need for distribution and export facilities.

Trucking regulations: Driver shortages and an aging workforce, combined with new regulations in the trucking industry, could increase the industry’s cost structure. While the introduction of new autonomous technology may balance this trend, increased trucking costs could drive more conversion to rail in the near term.

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