US Goods Distribution Industry Undergoing Disruption

The Panama Canal has been expanded, but several East Coast ports are not yet ready to handle the large ships that can now pass through the canal, says Cushman & Wakefield.

CHICAGO—The market for industrial real estate has in many ways never been better. The on-going expansion of e-commerce has distributors overhauling their supply chains and developers breaking ground on new facilities across the US that can handle the flow of products.

But some experts say that behind all of this activity a few problems have become apparent with the global supply chain. The Panama Canal expansion is done, but the transit rates are quite high, and East Coast ports are not quite ready to handle the larger ships that can now make the trip. Furthermore, rates charged by ocean carriers has plunged due to overcapacity, putting these groups at risk, and inventories are not turning over as quickly as they were one year ago. What it all means is not yet clear, but after years of expansion, the specter of recession can’t be dismissed.