People are beginning to feel optimistic about a bright future as the 2014 predictions are rolling in. The US GDP should see an increase of at least 2.7%, with others calling for growth of 3% for the first time since 2005. As manufacturers cautiously move forward with their recovery efforts, warehousing is at an awkward spot in the cycle, with need picking up much faster than construction due to lagging rent growth and financial constraints. As such, the U.S. is facing a shortage of Class A Industrial space. Even more concerning is space located on the rail, which is necessary to facilitate intermodal needs. As regulatory issues force diesel fuel costs to remain stubbornly high, intermodal and rail transportation continue to be beneficial tools in any supply chain tool kit.
A recent report shows fourteen consecutive quarters of declining vacancies in the warehouse sector. The demand for real estate and the plethora of acquisitions made during the recession have left many with a patchwork of distribution centers, now requiring consolidation. Many are finding the solution is to continue and expand relationships with trusted, experienced logistics providers who long ago staked claims along the rail.
The companies who have and are taking advantage of the opportunity to lay claim to trusted logistics providers are reaping other benefits as well. Unemployment rates are falling and expected to come to an impressive low of 6.5% by the end of 2014. While this is a positive indicator for the economic near future, it does present staffing and labor issues. The pool of qualified and excellent work candidates is shrinking daily. Many long standing logistics providers come with long standing teams, who are eager and ready for the challenge and opportunities that come with growth. Nexus is also taking advantage of programs such as WorkKeys, a skills assessment system which tests and screens candidates for job readiness.
The areas around NexusHubs have been following this nationwide trend. With Allentown, PA making the steepest drop, Chicago and Atlanta are not far behind. If your company is considering making a supply chain adjustment, now is the time, before good space is any harder to find.