Logistics/real estate: Jones Lang LaSalle report points to trade rebound as driver for port growth

With global trade slowly gaining traction, United States-based ports are taking steps to expand capacity in preparation for an uptick in demand along with focusing on capital development to meet infrastructure needs, according to the new Ports, Airports and Global Infrastructure report from global real estate firm Jones Lang LaSalle.

<p>A detailed analysis of the current and future impact of economic development initiatives, cargo volumes, trade flows and shipping patterns on industrial real estate surrounding the nation’s top seaports and airports.</p>

A detailed analysis of the current and future impact of economic development initiatives, cargo volumes, trade flows and shipping patterns on industrial real estate surrounding the nation’s top seaports and airports.

in the News

State of Logistics 2016: Pursue mutual benefit
U.S. carload and intermodal shipments are mixed for week ending January 14 reports AAR
Hänel Storage Systems donates AS/RS unit to Vincennes University
Truckers call on Trump for more efficient infrastructure
Other Voices: Counting the costs of warehousing IT failure
More News
By ·

With global trade slowly gaining traction, United States-based ports are taking steps to expand capacity in preparation for an uptick in demand along with focusing on capital development to meet infrastructure needs, according to the new Ports, Airports and Global Infrastructure report from global real estate firm Jones Lang LaSalle (JLL).

The wide-ranging report examines various aspects of the relationship between real estate and port activity. It does this by looking at port and maritime-related metrics like TEU (Twenty-foot equivalent unit) along with things like land values, lease rates, environmental issues, congestion, and land availability.

Among its findings is the fact that port-centric markets across the U.S. are showing signs that vacancy rates may be near peaking. And demand for warehouse and distribution space remains critically low, but market leasing activity is beginning to pick back up in many geographies, which JLL said is leading to cautious optimism although not yet at levels which support organic growth.

“Up until the last few years port systems did not really understand the real estate part of it,” said John Carver, executive vice president, Port, Airport & Global Infrastructure at JLL.

“It is all about adding more capacity, adding more berths, dredging…but as these ports reached their capacity level the topic changed to throughput and moving containers to get ready for the next incoming vessel. Every piece of cargo ends up in a building somewhere and there began to be an understanding in how real estate plays into this throughput.”

A major driver of this report, according to Carver, is to connect the dots between the real estate world and the maritime world and airports to some degree. Part of this connecting centered on leveraging how port systems and port-centric areas are bellwethers for industrial regions and markets.

“You can look at ports and see when ports start to turn for the better then you can see things are improving,” said Carver. “When volumes start to rise, the real estate market usually follows 12 months later. We are starting to see signs that volumes are ticking up again and are looking at port market activity as an indicator for when things start to improve.

And the JLL report points out that the top 13 U.S. ports saw cumulative volumes dip by 18.5 percent between 2007 and 2009, there has been some improvement since the second half of 2009 in the form of transpacific U.S. bound trade from Asia as traffic at West Coast ports is up 14.8 percent year-over-year.

But even though the economy is showing signs of life, the report points out that the recession put a major dent in demand for warehouse and distribution space around ports, as potential vacancy went up 1.6 percent to 9.0 percent. And net absorption increased by a negative 2 million square feet for a total negative 3.9 million square feet in 2010. JLL said that even with inventory replenishment occurring, it has not increased demand at most major port markets. And while vacancy is low, it is below the national average vacancy rate of 10.6 percent

Also included in the report is JLL’s new Port Index that rates U.S. ports on port performance and their impact to the surrounding real estate economy through a set of measureable criteria, including: land value-to-lease ratio; local vacancy rates; labor costs; on or near dock service by railroads; and planned infrastructure investment.

The top five ports in the index were the Port of Los Angeles, Port of Long Beach, Port of New York/New Jersey, Port of Savannah, and Port of Oakland.


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
Lead your organization through the driver shortage and over-the-road regulations.
Potential transportation disruptions are looming as increased over-the-road regulations are set to go into effect in 2017. Experts believe these regulations will further impact the already challenged driver pool as well as reduce driver productivity.
Download Today!
From the January 2017 Issue
Following LM tradition, we start off the New Year with our annual “Rate Outlook” cover story and subsequent Webcast
Moore on Pricing: The other TMS functional options
2017 Rate Outlook: Where are freight transportation rates headed?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
2017 Rate Outlook: Where are freight transportation rates headed?
Join our panel of top oil and transportation analysts for an exclusive look at where rates are headed and the issues driving those rate increases over the coming year.
Register Today!
EDITORS' PICKS
2017 Rate Outlook: Will the pieces fall into place?
Trade and transport analysts see a turnaround in last year’s negative market outlook, but as...
Logistics Management’s Top Logistics News Stories 2016
From mergers and acquisitions to regulation changes, Logistics Management has compiled the most...

Making the TMS Decision: Ariens Finds Just the Right Fit
The third time is the charm for this U.S. manufacturer on the hunt for a third-party logistics (3PL)...
Motor Carrier Regulations Update: Caught in a Trap
The fed is hitting truckers with a barrage of costly regulations in an era of scant profits....