Industrial property and warehouse investors have recognized a change in global supply chains in 2020 and it is benefiting Houston. This shift toward Houston commerce is a direct result of the trade war with China that began approximately two years ago. In addition, the COVID-19 pandemic has been widely blamed on China and the country’s lack of transparency has generated additional ill will.
Houston is in an advantageous position to accept increases in shipping due to its location and ease of access to both east and west. Houston is a mid-point location which makes it easier, and often cheaper, to transport goods and shipping containers to both east and west coasts. Trucking and rail costs can be considerable when shipping from one U.S. coast to another. Houston has other advantages including plenty of available land, lower rents, a growing labor market, and world-class logistics capacity.
Although fewer Chinese shipments are reaching Houston there has been some offset with an increase of shipments from other countries. The latest numbers state that exports from China into the USA were down 12.7% in 2019. The overall trade numbers between the two countries was down $100 billion in 2019. Some of these decreases are being replaced by exports from other countries. For example, Taiwan increased trade with the United States by more than $18 billion in 2019. And Vietnam had an increase of $9 billion.
In addition, U.S. exporters often favor Houston for the same reasons. Easy access and cheaper transportation costs to a mid-point departure location work in Houston’s favor.
With a low cost of living for employees, Houston area transportation and warehousing companies are in a prime position for this trend. Houston has been a prime destination for shipping companies and now it is becoming more important. Industrial property developers and warehouse investors have also noticed the trend and Houston will see further real estate construction.
Pingback: Online Grocery Shopping Spurs Demand For Cold Storage Warehouses