In the second installment of its two-part special report on automation and logistics real estate, Prologis Research delved deeper into how automation can unlock potential competitive advantages for customers.
The report, How Automation Can Help Navigate Urgent Supply Chain Challenges, describes how the growth of e-commerce over the past decade has shown just how critical logistics real estate is to the modern supply chain. Logistics customers will need the right buildings equipped with the right features and situated in the right locations to meet the needs of the supply chain and, importantly, end consumers who have increasingly higher service level expectations.
Additional key takeaways include:
- The acceleration of structural supply chain trends such as e-commerce could lead to a critical shortage of logistics real estate. In the U.S., new supply could fall short of demand by up to 140 million square feet over the next five years.
- Automation has the potential to increase revenue generated per square foot of logistics space. Greater productivity can help offset a lack of available space, most notably in infill locations where vacancy rates are often <1%.
- E-fulfilment footprints must double in size over the next five years. Automation’s ability to enhance productivity is key to meeting e-commerce demand and high consumer expectations.
- Automation offers economic benefits for logistics real estate. Customers that incorporate automation sign longer leases and are more likely to renew, which cuts downtime and related costs.