The biggest issue facing warehousing and logistics in Jacksonville is the mounting pressure from rising warehousing/distribution costs and shifting global trade dynamics.
As more companies have flocked to the area for strategic access to Florida’s growing population, demand for industrial space has surged, leading to unprecedented increases in warehouse rental prices in Northeast Florida.
This growth, while beneficial for the region’s economy, presents challenges for businesses which are compounded by current global trade issues around tariffs.
While the lingering effects of tariffs on imported goods are not yet known, the immediate impact has disrupted what has already become a challenging market in a post-COVID world.
With the uncertainty of U.S. imposed tariffs worldwide, companies are reevaluating their supply chains with some using creative means to minimize impacts from tariffs.
Some are stockpiling inventory to avoid higher costs, leading to increased demand for warehouse space. Others are delaying new lease commitments, creating uncertainty in occupancy levels.
This volatility has significant implications for warehouse occupiers.
In some cases, third-party logistics providers (3PLs) are stepping in to fill the gap, offering flexible solutions for businesses hesitant to commit to long-term leases amid trade uncertainties.
However, the reliance on 3PLs may not be sustainable in the long term, especially if tariffs disrupt traditional supply chains.
Jacksonville’s warehousing and logistics sector is navigating a complex landscape shaped by a return to pre-COVID activity coupled with increased occupancy costs, strain on infrastructure and international trade policies.
While Jacksonville’s strategic location and transportation infrastructure offer advantages, businesses must adapt to the evolving economic environment to maintain resilience and competitiveness.
Mark Scott is a Partner in Commercial Real Estate Solutions with Foundry Commercial.