TAKEAWAYS
Need warehouse space? It should be slightly easier to come by into 2023. A recent Prologis report focused on Q2 2022 activity and predictions for 2023 expects a small increase in vacancies. The reason: Demand will drop and supply chain movement will improve, which will get more products into the marketplace. Here are some key numbers from the report: • Vacancy rates remained at an all-time nationwide low of 3.1% in Q2. • Rates are expected to rise to 3.2% by the end of 2022. • Rates should rise to 3.7% by the end of 2023. • Warehouse rents jumped 16% in the first half of 2022, because demand remained high and rents rose in response to materials inflation, land shortages, and labor and supply chain issues. • Capacity utilization rose to 85.6%, which seems to show that no excess space existed within facilities due to higher retail sales and restocking eorts. Looking forward, deliveries should be able to meet demand by the end of 2022, Prologis predicts, and should even exceed demand over the next 18 months. That should give those looking for warehouse space more leverage negotiating leases. Prologis estimates that 800 million additional square feet of space will be needed for current growth and future replenishment estimates. The report also notes that wholesale and retail inventories have risen by 7% net over the past six months alone. Taking into account current and future replenishment eorts, the ratio of inventory to sales is expected to level o at 5% to 10%, which is higher than pre-pandemic numbers. WAREHOUSE SPACE: CAN YOU FIND IT?
Consumers Go on an Online Spending Spree
Despite current worries about an economic downturn, consumers are still shopping—especially online. And retail logistics companies keep shipping products. As a result, the global retail logistics market is forecast to jump from $231 billion USD in 2021 to $622 billion USD by 2030. That computes to a 12% compound annual growth rate over that time. That’s the prediction made by Acumen Research and Consulting in its Retail Logistics Market, Share, Analysis Report and Region Forecast, 2022- 2030 report. It credits the surge in e-commerce and global customers’ increasing digital literacy for the boom in online sales. And as smartphones and internet access spread to more and more markets, online shopping will only continue to grow. The report surveyed key market players such as APL Logistics, C.H. Robinson, A.P. Moller–Maersk, DSV, DHL, FedEx, Nippon Express, Kuehne + Nagel, UPS, Schneider, and XPO Logistics. Behind the good news, though, is the pandemic’s ongoing impact. The report contends that the pandemic has hurt the global economy in three ways: 1. It has damaged pro tability. 2. It has directly harmed production and demand. 3. It has depleted capital and cash ows. As a result, retail logistics companies are still struggling to regain their footing and learning, on the y, how to meet customer behaviors that have changed because of the pandemic, says the report. Additionally, it notes that retailers are also dealing with a data shortage and declining revenues. On the bright side, increased use of robotics and robotic process automation has greatly helped global retail logistics market value, and robotics will only become more important to the sector moving forward. On top of that, the growth of big data analytics in retailing and, by extension, retail logistics operations, will help supply chain companies identify bottlenecks and streamline the ow of goods and resources.
August 2022 • Inbound Logistics 19
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