This week I thought I would follow up on some of the topics discuss here recently and also provide some links to events having a substantial impact in the supply chain world.
Last week I focused an entire post on SOLAS. As a follow up, the rule and whether or not the shipping industry will/can comply with its mandate heated up this week. One article in the Journal of Commerce cited a CargoSmart survey of shippers where the majority of shippers were not prepared to comply with the weight verification regulation.
While SOLAS has been the focus of the shipping industry, the trucking industry is dealing with its own set of regulations. Even though it won’t be in effect until December 2017, the Electronic Logging Device requirement (ELD) is already causing changes in the industry. There is an expectation from some that this regulation will impact small and medium trucking companies the most, leading to reduced capacity in the industry as these small and medium companies go out of business. Some trucking firms, such as Swift, are stating that shippers are not inviting firms to bid on projects unless they have a plan in place to comply with ELD.
Supply chain real estate was in the news this month as major industrial real estate brokerages released their 1Q 2016 numbers. Across most markets in the US, they supply of industrial real estate, especially distribution centers, is increasingly limited. According to my firm, Cushman & Wakefield, the national industrial vacancy is at its lowest level in the past 30 years and is 240 basis points lower than its 10-year historical average.
Lastly, the interaction of technology and real estate is of increasing importance to logistics firms. Just today the Wall Street Journal published an article citing the increasing technological changes in warehouses. As supply chain real estate advisors, we are working with companies and vendors to determine how we can provide a real estate solution which will meet the technology requirements throughout the expected occupancy term. Due to the infrastructure inconsistencies, such as internet bandwidth, antiquated and obsolete internal wiring, and insufficient power supplies, it is important for companies to understand what limitations they may have to support these new technologies in certain locations.