LOS ANGELES-Booming imports at the Port of Los Angeles could be a harbinger of similar demand for national and regional warehouse space, says a Jones Lang LaSalle analysis.
Local imports increased 34.1% in February, 2013 in a year-to-year comparison with 2012, according to JLL. January, 2013 was also up 4.4% year-to-year. Southern California ports handle 40% of the nation's imports, with China accounting for 55% of that market share.
While, like mutual funds, past import performance is not necessarily indicative of future success, the imports surge is a positive indicator for warehouse leases.
“Historically, absorption rates track very closely with the inbound loaded TEUs,” says senior VP Barry Hill of JLL. ”From what I can tell, the lease rates are generally impacted, at least in recent history.”
While the beginning of each year traditionally sees a surge in imports – Chinese New Year celebrations cause overseas factories to deliver bulk quantities because they will close for two weeks -- the past percentage increases weren't as dramatic as this year, Hill tells GlobeSt.com.
“I think one could assume, because it's such a big jump, that we can expect to see higher port volume in the coming months,” Hill says.
As previously reported in GlobeSt.com, the Port of Los Angeles is in the midst of a major capital improvement program designed to upgrade facilities and access. The improvements are aimed at keeping pace with other national and international ports that have emerged as serious competitors.
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