Will port congestion also drive up house prices?
The epidemic has fueled consumer demand for e-commerce, which in turn has created a boom in the shipping industry. However, due to container congestion at ports and depletion of yard space, logistics companies have begun to set up storage facilities near the port, which unexpectedly pushed up related rents and property values. This has become real estate. The new blue ocean of the market. Logistics companies and port operators are scrambling to lease vacant land near container terminals, driving up rents and property values, setting off an investment boom in coastal outdoor storage real estate.
In densely populated metro areas where land is expensive, rents near the port of the metro area are surging the fastest. Long Beach, Calif., is one such example. According to CBRE, the world's largest commercial real estate company, the vacancy rate for industrial real estate in Los Angeles was only 0.5% in the first quarter of this year.
With the explosive growth of e-commerce, warehousing and fulfillment centers have become the hottest real estate types. Demand is expected to surge for the space now available for container storage. The Georgia Ports Authority, which manages the Port of Savannah, said it has leased six parcels of land in Georgia, Alabama and North Carolina that will be turned into temporary container storage facilities. The Port of Savannah is one of the fastest-growing large ports in the nation, but containers are flooding in and there's no room for them.
Curtis Spencer, chief executive of logistics consultancy IMS Worldwide, expects temporary container storage facilities to become a permanent phenomenon as the underlying problems of soaring freight volumes and lack of land remain. Logistics operators, already overwhelmed by the surge in business and lack of workers, are making the problem even more difficult when containers cannot leave ports in time. Empty containers that have been unloaded have nowhere to put, another problem facing ports across the United States.
In addition, zoning is also a major concern. Local regulations often impose many restrictions on the use of land for heavy industry, and stacking containers is considered illegal. Businesses are looking for a different way to find a place to store the containers. Container storage company Chunker CEO Brad Wright said they had signed up with Sears to unload containers using the established retailer's vacant store and its parking lot near the California port.