Logistics real estate market near ports booms due to historically high shipping
Good morning! It’s Thursday morning and we’re ready for the weekend… while trying to hit all those deadlines before Christmas. 🎄
Despite volatile rates and talks of West Coast port pitfalls, historically… international shipping container volumes are higher than ever. Over the past decade, the industry has grown 36.5% according to a recent CBRE Global Seaport Review. Because this increase is paired with whopping e-commerce growth, companies are scrambling to obtain warehouse and distribution space near the ports of entry for their imported product.
Check out today’s featured article from AJOT to read about the increased need for logistics warehousing space near the seaports and how the international shipping container volume increases over the years have made the market very competitive. ☕️
Featured Article:
As ocean shipping grows, demand for logistics space at seaports booms | AJOT
“A 36.5% jump in international shipping container volumes over the past decade is driving strong demand for logistics space near seaports, according to the recent CBRE Global Seaport Review.”
Driver Issues & Owner-Operators 🚛
2023 “trucking recession” is a real possibility after stark 2022 peak season
Peak season is typically a time of stress and profit for the trucking industry. It typically refers to the busiest time of the year for shipping and transportation and can vary depending on the type of goods being transported and the region in which the trucking company operates. The holiday season, which includes Thanksgiving, Christmas, and Hanukkah, is also a busy time for the trucking industry as retailers ramp up their shipments of goods to stores and customers. But this year… retailers started early and finished slow.
In October 2022, trucking conditions hit an 18-month low according to FTR Transportation Intelligence. The for-hire tonnage index experienced its largest plummet since its conception in the month of November, according to the American Trucking Association. Large carriers are warning of future industry slumps, and most industry experts and leaders are predicting a difficult 2023 season.
Owner-Operators & Regulations ⚖️
New EPA standards may put small trucking companies out of business, says OOIDA
The Owner-Operator Independent Drivers Association (OOIDA) is slamming the EPA over what they’re defining as “unrealistic regulations” for the trucking industry.
The Environmental Protection Agency (EPA) is a federal agency of the United States government that is responsible for protecting human health and the environment. Its mission is to protect the public and the environment from the harmful effects of pollution and to ensure that all Americans have clean air, land, and water. To achieve this mission, the EPA develops and enforces regulations that set standards for various forms of pollution, such as air pollution, water pollution, and hazardous waste.
In the first round of trucking regulations since 2001, the EPA issued new guidelines on December 20th that will require truck manufacturers to comply with nitrogen oxide standards that are 80% less than the current levels. Once published in the Federal Register, this rule will go into effect in sixty days.
The act is one that its critics are saying is outlandish and too expensive for small companies to foot the bill overnight.
Let’s Get Global 🌎
Choose GIF via GIPHY
🇪🇺 Amazon commits to allowing Prime sellers to choose the carrier for logistics services in the EU. By making this decision, the massive retailer is scuttling past a potential fine of $50 billion by the European Commission for breaking the law. This promise by Amazon is in the wake of two antitrust investigations launched into the company, and if the agreement is breached it could result in a 10% loss of global revenue for Amazon. Similarly, the company is the defendant in a California lawsuit due to “stifling competition” with the selective use of a “Buy Box” among sellers - a method that allows buyers to easily add items to their online shopping cart.
🇨🇳 China calls for aid. Local Chinese manufacturers are under pressure after China’s Minister of Defense Wang Wentao highlighted the country’s belief that other countries are looking to “politicize and weaponize” the global economy. Wentao went on to encourage these Chinese companies to enhance their manufacturing lines, regardless of disruptions. This likely refers to Foxconn Technology Group’s iPhone factory in Zhengzhou facing an array of challenges in production since October.
🇬🇧 U.K.-based Ellerman City Liners now delivers directly to the GCT Terminal in New York. The port rotation includes three locations in Europe: Antwerp, Belgium, Rotterdam, Netherlands, and Tilbury, England. This move comes after Ellerman highlighted the need for quick transits and customer service improvements. Brian Kobza, Director of Sales and Marketing for GCT New York, has celebrated the decision and notes that New York is the first port of inbound call for the liner.
iLevel With You
More topics for the average American household to consider…
🥩 South American Beef Inc. has filed for Chapter 11 bankruptcy. The West Des Moines, Iowa-based frozen meat importer filed its petition with the U.S. Bankruptcy Court last week, leaving many trucking and logistics firms out to dry. With assets and liabilities accounting between $10 and $50 million, the company had reported a nearly $57 million gross revenue. Beef, lamb, goat, mutton, veal, seafood, and poultry were imported from countries such as Argentina, Uruguay, and Australia through the company.
🚙 Small parcel delivery companies grew in 2022. While shipping volumes increased, alternatives to the big guys such as UPS and FedEx found their niche. LaserShip/OnTrac, GLS, and The Frontdoor Collective are some of the smaller delivery companies that made massive strides in expanding capacity and meeting customers’ needs. Consumers look for reliable reputations and on-time providers… it seems that the larger carriers need to work on cleaning up theirs.
❄️ Chicago winter storm threatens to disrupt Christmas travel. Several airlines such as United Airlines Holdings Inc., Delta Air Lines Inc., and American Airlines Group Inc. have issued travel waivers to passengers for rebooking holiday travel plans. A powerful winter storm will be freezing the eastern two-thirds of the country. Traveling in freezing conditions can also pose a number of challenges in terms of vehicle maintenance and operation. Cold temperatures can make it more difficult to start a vehicle, and they can also cause problems with the battery, tires, and other components.
GET SMART
Ramp up that brain power for these advanced topics…
😵💫 Fedex’s Q2 earnings are down, resulting in annual declines for the company. Both revenue and net income plummeted this year due to lower demand and volumes, according to FedEx Corp. president and chief executive officer, Raj Subramaniam. Subramaniam however has remained optimistic, claiming that FedEx has displayed acts of the ongoing transformation in the light of a weaker environment after a volatile few years.
👩💻 Shipping and returns are the biggest costs associated with running an e-commerce business. Amazon, the world’s largest online retailer, is well aware of this. Profit margins are thin and the price associated with shipping an item can make all the difference. When optimizing this process, some retailers have turned to free shipping options while offering a yearly subscription - like Amazon Prime. Some are now shipping directly from their suppliers instead of utilizing costly warehouse and distribution space.
🪡 Failure to digitize means money is left on the table. Digital transformation is the process of using digital technologies to fundamentally change how an organization operates and delivers value to its customers. It involves the integration of digital technology into all areas of a business, fundamentally changing how the business operates and delivers value to its customers. Digital transformation can have a significant impact on an organization, helping it become more efficient and innovative, and enabling it to better meet the needs and expectations of its customers.
Warehousing 📦
CBRE sees spike in demand for seaport real estate | DC Velocity
DC Velocity Staff writes about the spoke in demand for warehouse space near the seaports, recorded by real estate firm CBRE.
Trucker’s Lounge 🧢
Think of truck drivers on the road this Christmas | TruckNews
Truck News contributor Michael Zelek writes about the importance of recognizing the hard work of truckers on Christmas Eve and Day.
Ports 🚢
G Captain contributor Mike Schuler writes about the incredible decline in west coast port volume.
Industry Forecast 📊
Supply Chain Envoy Stephen Lyons Sees Significant Improvement From 2021 | TT News
TT News Senior Reporter Dan Ronan writes about White House Supply Chain Envoy Stephen Lyons’s satisfaction with the closing of 2022.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 28, 2024, from iLevel Logistics Inc.