There is a severe shortage today of qualified truckers, especially ones who will do long over the road runs. Unlike some other low skill jobs, truckers need to not be on drugs and have skill handling a large rig. Long distance drivers have a lonely life away from home for long stretches, and sleeping in the cab or a truck stop room. These days there are better alternatives for many of these guys to earn a good wage and not have these other issues. Some of the big trucking companies are trying to schedule drivers on 200 mile or less trips so they can go home every night. The problem is getting worse as the economy grows and as demand for drivers increases.

For CRE in the warehouse distribution business there is also a shortage of qualified workers. The answer now is AI and robotics. Warehouses and distribution facilities are moving to mainly automated stacking, picking, shipping. The number of humans now working in these facilities if they are fairly new and modern, has declined by 25%- 50% or more. For CRE there are several implications. Warehouses need to be powered sufficiently, and fitted out properly to be able to have the digital capacity to control the robots properly. The other thing that has been an outcome is there is far less need for employee parking, and so the foot print can be larger. Towns are allowing variances for less parking per sq ft of building in many jurisdictions as a result.

The other huge change in this segment is the opening of the new locks on the Panama Canal. Los Angeles has been unable to handle the growth and the regulations and costs of trying to do things in CA has become too great.  Now the new locks are able to handle far larger container ships from Asia that go direct to east coast ports with far larger loads. The US ports are in a development and expansion mode and are becoming logistics centers with real opportunity for CRE. Some are doing public private deals and others are selling land to developers to build warehouses and infrastructure to meet the new demand. This is a massive shift in logistics from what we knew and it is going to grow over the next several years. It is a less costly for shippers now to bring their containers in to the east coast and move it from there to eastern markets instead of offloading in Los Angeles and dealing with regulations, traffic and warehouses that are now not so near to the port.

For developers who are willing to go to these east coast port areas and build automated warehouses, there is real opportunity. In the not too distant future there will be self-driving long haul trucks to fill the demand, and warehouses will need to be able to accommodate these trucks and to have recharging stations for the electric trucks which are going to be prevalent very soon.

Simple old warehouse distribution is not so simple now and will become more complex over the next few years.

The views expressed here are those of the author and not ALM Real Estate Media.