The COVID-19 pandemic and the subsequent lockdowns sent a shockwave through numerous industries across the U.S. This shockwave came in the form of considerably high drops in business.
However, the CBRE Group has recently released a report showing that the warehousing industry has been experiencing a rapid upswing with a new high-demand for warehouse space. Furthermore, companies are not just simply stabilizing, they are now requiring even more space than in the pre-pandemic landscape.
In the CBRE report on industrial real estate post-pandemic, researchers have found that the industrial real estate raised an entire 43% between roughly April 15 and May 14. This came as a comparison tho the previous 30-day period.
This is a large spike to see in the warehousing industry, especially since the U.S. is still trying to navigate numerous COVID-19 concerns and other widespread issues coursing through the industry as a result of the pandemic. These numbers represent a glimmer of hope for both the forklift and the warehousing industry as the two often go hand in hand.
What Effects has COVID-19 had on Warehouse Space?
Let’s take a look at what effects COVID-19 had on the warehouse space during the peak of the pandemic…
- Even though there was a surge in e-commerce sales, many retailers were left with inventory that they simply could not move. The economy as a whole had been brought to its knees with the exception of who was deemed essential workers. Because of all of this, inventory began to sit in warehouses for longer periods of time.
- There was a rise in short-term warehouse leasing options (under 12 months). This shows us that many vendors began to look for temporary warehouse space in order to keep up with the fluctuation of demand in the market.
- There is currently a demand for warehouses that are 100,000+ square feet and this is a statistic that has remained consistent over the span of the last month. To put this in perspective, larger warehouses took a 5% decrease in demand during the first month of the COVID-19 pandemic but this number rose again in May.
CBRE has predicted that most retailers will decide to continue holding to a stance of watching what the market does and then adjusting accordingly versus making predictions in relation to capacity, supply and demand.
Increased Warehouse Labor Means More Forklifts on the Floor
Finding the right amount of labor to meet consumer demands has been a hurdle in the last several years, with many warehouses upgrading or adding to their fleet of forklifts, heavy machinery and staff.
According to a different CBRE report, analysts have determined that, due to massive spikes in the e-commerce industry as of late, warehouses are already looking at adding roughly 450,000 warehouse workers. What this means for the forklift industry is that by the beginning of 2021, warehouses will undoubtedly need to increase the number of lift trucks available to these additional workers to keep up with the pace of the economy.
In fact, forklift sales are projected to grow at a CAGR of about 3.9% from 2021 through 2026, making it a 20.3 million dollar industry by the end of 2026.
There is an Increasing Demand for U.S. Warehouse Space
As the economy begins to stabilize itself again, consumers are more than eager to get back to shopping. Since consumers are rushing out to make more purchases post-pandemic, this means that more warehouse space is needed for inventory… and more machinery to move that inventory around.
When looking at these reports, one thing becomes apparent, and that is the fact the the forklift market is about to be flooded with new buyers and operators all looking for the best deal to add a new lift truck to their expanding fleet before 2021 gets here.
To stay ahead of the crowd and get a jump on the new year, reach out to the team here at Atlanta Liftruck Salvage to help you find all the used forklift parts you need in order to keep up with the growing consumer demands.
Even as the impacts of coronavirus lessen moving forward, there will still be a strong demand for ecommerce, especially online grocery delivery that had not existed pre-coronavirus. Retailers will also be eager to future-proof their supply chains even more. There is a new era of post-COVID-19 shopping that requires a repositioning of inventory, new management systems, and greater lines of supply chain communication.