The United States recently faced significant supply chain disruptions due to the global shutdown caused by the COVID-19 pandemic. These disruptions, including labor shortages, production shutdowns in China, and stalled logistics networks made it challenging to get goods to market.
According to Newmark’s recent report “When it Rains, It Ports: Supply Chain Disruptions to Influence Industrial Market Activity in H2 2024,” there are still challenges ahead for the supply chain. The report highlights three issues that could impact U.S. ports and industrial properties.
Firstly, a volatile weather environment is expected with an above-normal Atlantic hurricane season predicted by NOAA in May 2024. This can have a dire impact on East and Gulf ports as well as freight transportation timeliness.
Secondly, labor dissatisfaction may also cause disruptions at West Coast ports such as Long Beach and Los Angeles. With signed contracts already in place on the West Coast, concerns now shift eastward with contract talks suspended for port workers from Maine to Texas.
Lastly, geopolitical tensions between China (which accounts for a significant portion of U.S imports) and the Biden Administration’s new tariffs may lead to changes in industrial operations nationwide.
These challenges are expected to have various impacts on the industrial sector:
1) Increased demand for warehouse space near SoCal ports leading up one-day drive away from Southwest intermodal markets.
2) Higher utilization of air-cargo hubs for time-sensitive deliveries.
3) Diversification of industrial operations resulting in new space requirements across strategic markets.
4) A rise in demand for manufacturing facilities due domestic manufacturing expansion efforts or nearshoring initiatives.
In conclusion,the current supply chain crisis has prompted experts’ actions towards mitigating future disruptions; however other factors continue looming over this industry segment.”
