Half of DC Projects Represent Speculative Space

Nov. 18, 2013
E-commerce is driving a good percentage of the demand for distribution center infrastructure. Other recent logistics statistics point to a brighter economic picture.

Economy watchers and supply chain executives can take heart from a U.S. Census report that nationally, about 96.7 million square feet of distribution space is currently under construction. About half of this space is speculative, with an average building size of 360,000 square feet. Furthermore, 12% of that current total and about 30% of the demand for big boxes is related to e-commerce. 

These are among the latest industry numbers from the Logistics Market Snapshot, courtesy of the Georgia Center of Innovation. Other highlights from this report:

Transportation Indexes:

• Dow Jones Transportation index rose 6.1% during the month of October. (Stock performance of twenty large, well-known U.S. companies in the transportation industry, average of October 10th thru November 10th)

• NASDAQ Transportation Index increased 1.7% in October. (Averaged share weights of NASDAQ-listed companies classified as transportation companies, average of October 10th thru November 10th)

• The USDOT's freight transportation services index rose 0.8% in September 2013, rising for the third consecutive month to its highest all-time level. The index’s reading of 115.8 was up 4.3% from September 2012. (Source: US DOT)

• The October shipments index fell 3.5% over the previous month and fell 2% year-over-year. The October expenditures index fell 2.6% for the month, and increased 0.8% year-over-year. (Source: Cass Information Systems | Cassinfo.com) (Based upon transportation dollars and shipments of Cass clients comprised of over 400 shipping companies)


• Railroad bulk carload freight in October 2013 fell 1% from September 2013. Freight traffic in October rose 1.5% from October 2012, the highest year-over-year percentage increase in 22 months. Carloads excluding coal and grain increased 5.6% over the previous year.

• Intermodal rail traffic in October 2013 was 6.8% higher than in October 2012, and rose 0.8% from September 2013. Intermodal loadings have experienced year-over-year gains for 46 straight months. (Source: AAR.org) (Report includes rail car-loadings by 19 different major commodity categories as well as intermodal units)


• The ATA’s seasonally adjusted cargo index rose 1.4% in September after rising 1.4% in August. The for-hire truck tonnage index rose 8.4% from September 2012, the largest year-over-year gain since December 2011. (Source: American Trucking Association | Trucking.org)

• The spot market for truckload freight in October rose 0.3% compared to the previous month, and was 27% higher year-over-year. Truck capacity rose 24% for the month, and was down 0.9% year-over-year. (Source: DAT Trendlines | www.dat.com)


• Global air freight traffic in September increased 0.5% from one year ago, and remained steady from the previous month. North American air freight in September rose 0.9% year-over-year. (Source: IATA.org) (Global air freight covers international and domestic scheduled air traffic.)

• In September, the index of East-West air cargo rates rose 3.2% from the previous month. The average price of air cargo leaving the United States in September stood at $3.24 per kilogram. (Source: Drewry) (The Drewry East-West Air Freight Price Index is based on the average of rates ($US per kg) for air freight services on 21 major East-West routes.)

Ocean Freight:

• Import shipment volume at U.S. ports totaled 1.64 million TEUs in September. U.S. vessel imports increased 2% from the previous month and rose 7% year-over-year. (Source: Zepol Corporation | zepol.com)

• Import volume through major U.S. container ports is expected to increase 3.3% in November. In September, the latest month for which numbers are available, U.S. container ports handled 1.43 million TEUs, a 3.6% decrease over the previous month and a 2% increase over the same month last year. Total U.S. containerized imports are expected to increase 2.3% in 2013. (Source: NRF/Hackett Associates)


• The U.S. average industrial vacancy rate was 8.3% during Q3 2013, down from 8.5% in the previous quarter. (Source: Cassidy Turley)

• In Q3 2013, warehouse and distribution rental rates in the US averaged $5.11 per square foot, up from $5.05/SF in the previous quarter. (Source: Cassidy Turley)

Purchasing Managers Index:

• The National PMI rose 0.2 of a point to 56.4 in October 2013, the highest level since April 2011. New orders rose 0.1 point to 60.6 and production decreased 1.8 points to 60.8. (Source: Institute for Supply Management) (The PMI combines data on new orders, inventory, production, supplier deliveries, and employment. A reading above 50 indicates that the manufacturing economy is generally expanding.)

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