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Distribution Warehousing Upswing Due to Panama Canal Expansion and E-Commerce

Thursday, February 26th, 2015

The distribution warehousing industry couldn’t have received any bigger “favors” than the expansions of the Panama Canal and E-commerce. According to The Orlando Sentinel, the city’s commercial real-estate market is improving, and will get “a million square feet of new [industrial] space during the next year.” When the commercial real-estate association NAIOP met last summer in Orlando, they made these statements about the upswing:

  • Retailers want more industrial space to enlarge “their e-commerce, or online, sales operations.”
  • “Warehousing for online shopping” now accounts for “about 15% of industrial space.”
  • “As big-box stores continue to downsize,” retailers will lease more and more warehouses.
  • Warehouse distributors are now–or soon will be–building or leasing at southeast U.S. ports “that are closely tied to the U.S. distribution supply chain,” like Savannah and Atlanta, Georgia.
  • Pharmaceutical companies, which are now locating in the southeast, want “fiber optics and telecommunications capabilities” in their new warehouses, because this technology expedites mail-order prescriptions.

In Logistic Management’s U.S. Port Update 2015 they talk about the fact that The Panama Canal “will have ocean carrier deployments early next year”. What does this mean for ports and related distribution warehouses in Florida and Georgia?

  • The Canal will have a new traffic lane, and “new locks will allow…larger ships, providing greater economies of scale.”
  • A “customer-loyalty program” will be implemented “for the container segment,” meaning “frequent vessel operators will receive premium prices” once a “particular TEU volume (twenty-foot equivalent units of cargo) is reached.”
  • The Port of Savannah –“one of the top eight import gateways”– is in the midst of an update, which costs $706 million and includes “construction and environmental mitigation costs.” Right now, Savannah is “handling double-digit increases in imports.”
  • The shipping channel in Jacksonville is now being deepened to 47 feet to accommodate larger ships and facilitate easier port navigation.

Contact us if your company desires an up-to-date warehouse to take advantage of the immense trade, which the Panama Canal and increased e-commerce will bring.

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