Tuesday, January 19, 2010
Cushman and Wakefield and NAIOP Research Foundation recently released an industrial white paper titled "The Americas: New Age of Trade." The report examines critical issues impacting industrial real estate in the Americas. To help inform business decisions, the paper explores such areas as production, trade, and supply-chains, along with infrastructure investment, trade agreements, fuel costs, and the global downturn. The paper's primary focus is on regional trade and supply chain issues in the Americas.
According to the report, changes in the global trading environment have been a primary driver in the industrial real estate market for more than 20 years. Explosive growth in east-west trade from Asia to the United States has had a profound impact on supply chain management and related real estate decisions. More trade has also meant more attention to supply chain strategies that expedite production and ease trade flows across borders.
Higher fuel costs, a global economic downturn, and the growing sophistication of "near-shore" markets are causing manufacturers and logistics professionals to take a closer look at supply-chain efficiencies that can be found within the Americas. Erratic fuel costs, port development, the rise of the Caribbean, and the impact of trade agreements are covered in detail. The report also discusses major trends expected to have a substantial impact on supply chain management and warehousing in the coming years
Findings include:
- The North American Free Trade Agreement (NAFTA), signed in 1994, has contributed to an almost fourfold increase in trade between the U.S., Canada, Mexico and the rest of Latin America. It also encouraged cross-border co-production of many goods.
- The share of total trade has grown faster in the Americas than it has with Asia.
- Concerns about oil pricing are causing companies to reassess how far goods travel and by what means (i.e. plane vs. boat vs. truck vs. train).
- The length and the depth of the financial crisis will alter business and supply chain strategies in the coming years. However, given advancing technology, modern transportation, and growing consumer demand in emerging economies, a new age of trade is here to stay.
- New routes to move goods to market more efficiently are opening up thanks to investments in ports and intermodal gateways. Small fast growing ports in Mexico (Lazaro Cardenas) and Canada (Prince Rupert) give shippers more alternatives and a new mix of inland hubs a promise of more activity.
- Well positioned inland cities that have made the necessary infrastructure investments in rail terminals and highways are becoming even bigger warehousing players.
- The widening of the Panama Canal and the emergence of the Caribbean as a transshipment center are expected to boost U.S. East Coast ports and markets in the coming years. The Caribbean's location along east-west and north-south trading routes makes it an ideal location for transshipment facilities.
Download the complete report.
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