• ITVI.USA
    15,487.730
    -50.360
    -0.3%
  • OTRI.USA
    25.300
    0.130
    0.5%
  • OTVI.USA
    15,446.060
    -51.850
    -0.3%
  • TLT.USA
    2.720
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,487.730
    -50.360
    -0.3%
  • OTRI.USA
    25.300
    0.130
    0.5%
  • OTVI.USA
    15,446.060
    -51.850
    -0.3%
  • TLT.USA
    2.720
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
FreightWaves LIVE: Events PodcastNewsTechnology

Distribution facilities must increasingly be near end consumers: Prologis VP (with video)

Rapid increase of e-commerce demand highlights how choice of real estate can be critical to successful supply chains

The coronavirus pandemic has solidified the status of e-commerce in the global economy while becoming even more a part of modern life, said Melinda McLaughlin, vice president, global head of research for Prologis.

“What happened really was COVID-19 pulled a lot of adoption that would have happened and customers were, frankly, planning for over three, five, to 10 years, but pulled it all into one year,” McLaughlin said. “So when we emerge from this crisis, it’s not like we go back on that trajectory that we were pre-COVID; a lot of that adoption stays and is persistent.” 

FreightWaves’ chief strategy officer JT Engstrom talked with McLaughlin during the FreightWaves Future of Logistics Real Estate Summit on Tuesday. The event, with headline sponsor Prologis, is streaming live Tuesday on FreightWavesTV and on freightwaves.com

Melinda McLaughlin, vice president, global head of research at Prologis, talked about e-commerce logistics during the FreightWaves Future of Logistics Real Estate summit on Tuesday.

Engstrom’s Fireside keynote with McLaughlin was titled “Fine-tuning From Efficiency to Resiliency.” San Francisco-based real estate investment trust Prologis Inc. (NYSE: PLD) is a global leader in logistics real estate, with a focus on high-barrier, high-growth markets.

McLaughlin said a lot of the changes that were happening with supply chains were already happening prior to the pandemic because of international trade tensions.

“This retooling of supply chains for resilience, rather than efficiency, was something that predated the pandemic. We really saw it start to accelerate with all the trade tensions that arose,” McLaughlin said. “Before that, there were disruptions, but they tended to be localized, a port strike here, or a natural disaster over here. You can work around that.”

McLaughlin said when you have entire countries getting into trade disputes — such as China and the United States or the United Kingdom and the European Union — it’s not something that supply chains can easily navigate.

“We do see customers with this heightened focus on risk management as something that’s really been building over time,” McLaughlin said. “Now with a truly global disruption, I think it’s just taken the urgency level up a few notches.”

McLaughlin said going forward, companies will be planning for an “e-fulfillment operation that is significantly more important to your revenue stream than it was prior to COVID.”

One of the e-commerce trends will be companies aiming to establish larger networks of distribution facilities located near their end customers.

“When things go back to normal, I think consumers will go back to expecting goods reliably to their doorstep, and in shorter and shorter delivery timelines, and you frankly cannot achieve that without having facilities well positioned close to end consumers,” McLaughlin said.

Click for more FreightWaves articles by Noi Mahoney.

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Noi Mahoney

Noi Mahoney is the Cross-Border Freight Market Reporter for FreightWaves.com. He graduated from the University of Texas at Austin with a degree in English in 1999. Mahoney has more than 20 years experience as a reporter and editor. He has worked for newspapers in Florida, Maryland and Texas.

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