From The LoadStar, June 10:
The warehouse crunch is getting worse: projections from logistics property management firm Prologis and real estate specialist CBRE indicate that hundreds of millions of square feet of warehouse space will be needed in the US alone over the coming years.....MUCH MORE
A new report by Prologis Research suggests that, in the US market alone, for the next two or three years, 150-200 million square feet of new warehouse space will be needed every year.
This demand will be driven by two dynamics – the accelerated adoption of e-commerce and higher inventory levels – in response to supply chain disruption firms have suffered as a consequence of the pandemic. And the biggest push is going to come from the latter, Prologis predicts.
Its study points out that the retail sector saw inventory-to-sales ratios drop from an average of 1.65 in the 1990s to 1.45 in the eve of the pandemic. With supply chains so lean, many retailers could not respond adequately to sudden changes in demand.
To avert similar experiences in future, mean stock levels could go up between 5% and 10%, which would translate into aggregate demand for an additional 285-570 million sq ft of space.
“Several customer groups stand out for having very lean supply chains at present, including food & beverage, electronics/appliances, healthcare and diversified retail. In the ‘new normal’, the logistics real estate demand created by a reassessment of ideal inventory levels could be concentrated in customer industries that held little buffer stock, pre-Covid,” the Prologis Research team concludes.
Another 46 million sq ft will be needed to accommodate each percentage point shift of retail sales from brick-and-mortar outlets to online sales channels. Based on the 30% growth rate of e-commerce from March through mid-April, Prologis estimates that 140-185 million sq ft could be required in this segment.....
Previously:
April 27
The UK Food Situation Is Going to Get Interesting
World's biggest cold storage supplier could reach full UK capacity in three weeks
April 22
Shipping: "Global container shipments set to fall 30% in next few months" (warehouses are full)
April 16
Understanding the Oddities of the Food Supply Chain Caused By the Response To Covid-19
April 4
Supergrocer: "Inside the Story of How H-E-B Planned for the Pandemic"
March 30, 2020
"Coronavirus: Panic buying sparks surge in flexible storage demand"
And previously on cold storage:
June 3, 2019
Logistics: Big Money For Warehouses, Looking at Cold Storage.
...This next bit brings back some memories. My second stock to double was a cold storage company, actually a dairy with a cold storage operation that was valued at about one-quarter of comparables. I started chipping away at the float and before I got anywhere near enough stock, the management, who knew full well the value of the operation, did an LBO and took it private at 2x market and ended up generating cash-on-cash returns (for themselves) of around 40% per annum for a decade or so.June 6, 2019
Bastards.
"It's About To Become A Hot Market For Cold Storage Facilities"—CBRE
Cold is very important.
If interested see January 2019's "Logistics of Cold"
That essay mentions an apple farmer, Barbara Pratt. She's also Maersk's director of refrigerated technical services.
Maersk thinks pretty highly of her, giving her a page on the website: T
Unfortunately, when the cybercrooks attacked Maersk it was lost—you now get a "subdomain takeover" notice so, if interested here she is saved at the Internet Archive page.
