MIAMI—The ongoing evolution of supply chains is a key driver in the US industrial real estate market expansion. Businesses are looking to distribute goods across the country as quickly and efficiently as possible, but are faced with a nationwide shortage of truck drivers that poses a risk to existing distribution chain strategies.

Of course trucking plays a large role in the distribution of goods across a supply chain. But a new CBRE report also points to higher costs stemming from the truck driver shortage as a factor pushing users to turn to other land transport means, such as rail.

“Rising transportation costs, particularly those associated with trucking, are forcing supply chain users—manufacturers, importers, and exporters—to devise blends of warehouses and distribution centers that will most efficiently service the need for port access while enabling quick delivery to end users in densely populated metropolitan areas,” says Scott Marshall, executive managing director of Industrial Services for the Americas at CBRE. The report highlights a demand for warehouse and distribution space in markets that feature a significant intermodal component has been a strong indicator that users are choosing access to the rail network as a solution to some portion of their long-haul transportation needs.

CBRE predicts distribution markets with significant intermodal facilities—the Inland Empire, CA, Indianapolis, IN, Baltimore, MD, Dallas/Ft. Worth, Orlando, New Jersey Central, Portland, OR, San Antonio, TX, Virginia Northern and Houston—will grow their inventory of industrial space most quickly over the next 12 months. Much of the new construction in these markets is on or near intermodal pathways, CBRE said, largely to take advantage of the link that rail lines provide to ports and major distribution hubs.

“What makes intermodal projects work?” Michael Mullen, retired CEO and founding partner of CenterPoint Properties, asked during RealShare Industrial in Miami earlier this month. “The real driver here is population. You've got to have population. You need foreign trade zone status.”

Mullen has keen insights, given CenterPoint is focused on the development, acquisition and management of industrial property and transportation infrastructure that enhances business and government supply chain efficiency. The company has developed intermodal centers across the United States. As he sees it, transportation costs keep going up and rent as percentage of the cost of the supply chain keeps going down.

“We can prove that when you locate next to an intermodal center it reduces costs so much that you should be willing to pay more rent,” Mullen said. “Warren Buffett bought BNSF and Bill Gates is the largest shareholder of Canadian International. If you look at this over the long run, Buffett and Gates are pretty smart guys and I can understand why they are making these investments.”

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