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Disruption Demand: The Logistics and Warehousing “Next Normal” in 2020

Logistics

Consumer expectations have forced retail and inventory-based businesses to rely heavily on automation to fill orders and explore different options for warehousing to match the market. The disruption demand, caused by the pandemic environment, has created incredible pressure for businesses across the board – impacting automation trends in logistics and real-estate demand in warehousing.

The Future of Logistics:

As the disruption to the economy became more and more severe in Q2, the emerging trends in logistics came to fruition in a real way. The most prominent? Automation and robotics within logistics at distribution centers and warehousing operations. 

At the beginning of 2020, half of U.S. companies were open to investing in automation, with Logistics companies leading the pack at 55%. 

In these next quarters of 2020, and beyond, Logistics will only continue to breakout as a leader in automation technology as they adapt to increased e-commerce orders, are forced into micro-fulfillment strategies to up speed and accuracy, and attempt to jump the hurdle of workforce challenges.

Warehouse Real-Estate

Though many aspects of life and business came to a standstill last quarter, warehouse real-estate did not. According to The Wall Street Journal, real-estate firm CBRE Inc. reported activity jumped 43% from April 15 to May 14, with overall activity sitting 2.8% higher than this time last year. Not only are leases being renewed, but new, larger spaces are being secured in an attempt to modernize distribution efforts – like grocery delivery and micro-fulfillment. Prologis Inc., another real-estate company, estimates high inventory levels and accelerated e-commerce growth could increase demand for U.S. warehouse space by over 400 million square feet over the next two to three years, as these factors typically require three times as much space as traditional distribution operations.

The pandemic environment has caused obvious disruptions, but continuing trends in logistics and warehousing are keeping industries moving forward with new technology, increasing efficiencies and additional space.