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Supply Chain Disruptions Compounding Warehouse Shortage Pain

Supply Chain Disruptions Compounding Warehouse Shortage Pain

(17 November 2021 – United States) Record numbers of cargo ships continue to wait to unload in Los Angeles (LA) and coupled with limited warehouse space, corporates are being pushed to breaking point to keep up with resurgent customer demand as the pandemic recovery takes shape.

The global supply chain jamming up ports across the globe is also driving warehouses to capacity and forcing logistics managers to scramble for space. Every US$1 billion increase in online sales equates to a need for an additional 1 million square feet of warehouse space according to recent CBRE projections. US suppliers require a further 800 million square feet to inventory backlogs in case critical parts for autos and other products run short according to Prologis. Delayed shipments of construction inputs such as doorframes and conveyor belts are delaying construction of new logistics properties.

“I think it’s going to get worse. The short-term problem, I think, is going to be with us through 2023 commented Prologis CEIO Hamid Moghadam.

“A lot of spring goods got here late and didn’t sell, and then a lot of Christmas stuff came early because they were afraid of being late. This is the biggest challenge I’ve faced in my career” he added.

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