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Port Logistics Changes May Impact Phoenix

Graphic credit: CBRE

By Roland Murphy for Arizona Builder’s Exchange

According to CBRE Research, changes in how cargo moves through U.S. ports, particularly on the West Coast, could impact shipping, logistic and commercial real estate in Phoenix.

CBRE recently issued its 2015 North America Ports & Logistics Report, as well as a supplemental statement focusing on the Phoenix Metro area.

According to the report, container ship traffic and volume are expected to rise, in large part due to the expansion of the Panama Canal in 2016 to accommodate more traffic and bigger ships. Currently, ships using the Canal have a maximum capacity of approximately 5,000 20-foot shipping containers. Once the expansion is completed, larger ships will be able to carry 15,000-20,000 containers.

This increased volume flowing into the ports, particularly in Los Angeles and Long Beach, presents challenges to traditional overland shipping and logistics, according to CBRE. Among the many issues are labor concerns with dock workers as well as the volume of available trucks and drivers to haul the loads.

Since Phoenix serves as a key initial pass-through point for cargo leaving southern West Coast ports, these concerns could have a significant impact on shipping and logistics into and out of the area, according to the CBRE statement.

“Locally, companies that have a significant stake in the state of the U.S. shipping and logistics industries can be found Valley-wide. For instance, metro Phoenix has been established as a major emerging e-commerce hub,” said CBRE Senior Vice President Pat Feeney, a Valley-based member of the firm’s Port Logistics Group.

“Metro Phoenix is home to a number of third-party logistics providers as well as major manufacturing and distribution users, and the flow of goods between Arizona and the Ports of LA and Long Beach have huge implications on our local and state economies,” Feeney said.

One potential impact could be the transition from massive (1MSF+) regional distribution facilities to smaller, more localized facilities closer to major customer service centers for shippers’ consumer bases. Feeney says that could necessitate reexamining both how the supply chain is served and the types of commercial real estate opportunities and requirements needed to satisfy that demand.

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