A Roadmap for Industrial Real Estate to Survive Post-COVID-19

COVID-19 has thrown a monkey wrench at our supply chain operations, creating disruptions that will have lasting impact for the industrial real estate segment. The critical question now is how the industry can navigate this uncertain landscape.

WCL Consulting provides a roadmap, outlining the trends that affect the supply chain, trucking and warehousing. The upshot is that there are opportunities in these volatile times, provided that managers are agile and tactical.  

Here are some key points:

Supply Chain Trends: 

• Supply chain risk mitigation. This will grow in importance as we continue to witness the serious disruption of goods movement around the world. The ongoing tension with  China and the U.S. over tariffs and the disruptions of COVID-19 amplify this point.
• Alternative to China sourcing. Despite China’s mature supply chain ecosystem, a growing percentage of companies is considering making a change. Vietnam and Cambodia will likely be the beneficiaries, though importers will face rising business costs, development bottlenecks and less competitive workforces.
• Supply chain sustainability. “Going green” is not going away. The benefit goes beyond the environment: It can lower costs and increase customer loyalty and organizational goodwill.
• Accelerated digitalization. Shippers with digital platforms outperformed those using manual methods in responding to COVID-19 disruptions.

Trucking Trends:

• Autonomous heavy-duty trucks. No longer a fantasy, these vehicles are showing progress in efficiencies and cost reductions. Warehouse facilities will require modified yard layouts and process changes to accommodate autonomous vehicle interface operations.
• Major changes in trucking industry. There will be increased carrier bankruptcies and a higher number of mergers. At the same time, there will be improvement of technology and increased e-commerce influence.

Warehousing Trends:

• E-commerce’s continued growth. This will drive demand for efficient warehousing operations. Moreover, e-commerce and direct-to-consumer growth will transform the fulfillment operations of retailers, manufacturers, plus their wholesalers and 3PLs.
• Speed and accuracy in delivery. On average, 69% of customers will not shop with a company again if their delivery is late, so meeting customer expectations is critical. 
• Warehouse automation growth. Expect more warehouse robotics, automated guided vehicles (AGV), autonomous mobile robots ((AMR), cobotics, and automated picking processes.

The bottom line, sums up WCL Consulting president Jon DeCesare, is that “today’s ‘normal’ requires all organizations to modify the old ways of doing business, moving forward with innovative solutions.”