Supply chain disruptions have come from different directions in recent years, but they've exposed the same underlying flaw: networks built for efficiency, not flexibility, can quickly become liabilities when conditions shift.
The pandemic, tariff volatility and fuel shocks have each tested global logistics systems in distinct ways. Yet all three have pushed occupiers toward the same conclusion—simpler, more adaptable supply chains are now a competitive advantage. Companies are trimming complexity, moving some production closer to demand, diversifying freight options and prioritizing newer, more efficient industrial space.
That shift is changing how performance is measured in industrial real estate. It is no longer just about securing the lowest-cost space, but about choosing markets and buildings that help occupiers maintain service levels, control expenses and respond quickly to disruption.
While the shocks themselves differ, their impact on strategy is converging, Jamil Harkness, senior research analyst of national industrial, at Newmark, tells GlobeSt.com.
"The pandemic exposed the risks of capacity shortages and misplaced inventory," Harkness said. "Tariff volatility made foreign sourcing harder to price and plan for. Higher fuel costs have made the cost of distance much more visible in the P&L.
"Taken together, those pressures are increasing the advantage of markets with strong consumption access, freight optionality, manufacturing ecosystems, and modern supply."
Even when disruptions are temporary, their operational effects tend to linger. Harkness was cautious about predicting how long the latest geopolitical tensions will last, but noted that timing may matter less than the behavioral shifts they trigger.
"But even when a shock is cyclical, the operational response can last much longer," he said. "And the longer these last, the more pressure it will exert on margins and the consumer."
So far, the latest fuel-driven disruption has not produced dramatic shifts in leasing or location strategy. Instead, early signs point to more subtle adjustments in how occupiers are operating and planning.
"The earliest indicators are signals such as delays in decision-making, conversion of some freight from truck to rail, and additional inbound footprint-optimization questions," Harkness said.
If higher fuel costs persist, the impact is likely to show up as caution rather than contraction.
"Looking ahead, should this fuel price spike persist, the risk is not a collapse in demand but a slower, more selective leasing environment than we initially expected at the start of the year," he said.
"Transportation remains the largest component of business logistics costs, and the global system is still vulnerable to shocks moving through key trade routes and energy markets."
That dynamic is expected to reinforce a divide between stronger and weaker industrial markets. Demand may remain steady overall, but performance will increasingly favor locations and assets that offer flexibility and resilience.
Harkness said markets far from major consumption centers, reliant on a single transportation mode, less connected to manufacturing or evolving trade flows, or dependent on older, commodity-type buildings, are more exposed to disruption.
By contrast, major hubs such as Dallas, Southern California and Chicago are better positioned—not because they are immune to shocks, but because they offer more ways to absorb them.
"The most vulnerable areas are those where occupiers have fewer options as costs rise or freight routes change," Harkness said.
Fuel shocks, in particular, tend to hit long, truck-dependent networks the hardest, while tariff shifts put pressure on markets with weaker ties to North American manufacturing and trade flows.
"And as leases roll, older and less efficient buildings may feel more pressure because occupiers are becoming more selective about throughput, labor efficiency, and transportation costs," according to Harkness.
Ultimately, exposure is not just about geography. Markets and submarkets with limited access to consumers, fewer freight alternatives and a lack of modern industrial product face the greatest risk as supply chains continue to evolve under pressure.
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