Recent world events will force companies to reconsider their global low-inventory distribution models and deploy more regional warehouses. That prediction comes from a prominent industry analyst, Colography Group President Theodore Scherck, who sees shippers rethinking their supply chain strategies. "Businesses are learning the hard way that extended supply chains come with a risk: The longer the supply chain, the higher the risk of disruption," Scherck said during a session at the Council of Logistics Management's annual conference. "Demand for warehouse space will continue to grow as businesses protect their supply chains from terrorist attacks, geopolitical flare-ups, natural disasters, labor unrest and other unforeseen events."

Shocks to the system, such as last year's terrorist attacks on America and the shutdown of U.S. West Coast ports, are forcing businesses to reconsider how their goods are produced, stored and shipped. Companies will deploy inventory in regional warehouses as a buffer against disruptions in their supply chain. Two-thirds of all U.S. shipments now travel less than 600 miles to their destination, said Scherck, whose Atlanta-based firm conducts research on transportation trends.

Transport modes will be affected too, Scherck believes. The slowdown in the economy will keep the pressure on shippers to look for lower-cost alternatives to their existing practices. For instance, shippers will increasingly opt to move their expedited goods via ground rather than air wherever feasible. "The boom in warehouses and inventory is a perfect fit for regional trucking systems that can pump out goods from warehouse to market over relatively short distances," Scherck said. "Surface transport systems have dramatically improved their delivery services and offer the same value-added features once reserved for airfreight carriers. As a result, they will continue to take share in the U.S. market away from airfreight providers and long-haul truckers."