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American Manufacturing Is Coming Back… So Are Strikes

American Manufacturing Is Coming Back… So Are Strikes

By Rachel Premack of FreightWaves

President Joe Biden’s $9.2 billion electric vehicle…



American Manufacturing Is Coming Back... So Are Strikes

By Rachel Premack of FreightWaves

President Joe Biden’s $9.2 billion electric vehicle manufacturing loan to Ford seems like a perfect meld of American interests. Announced in June, the loan to the Michigan automaker and a South Korean battery manufacturer will spur the building of three EV battery plants in the U.S. That cheerfully means eco-friendly cars and blue-collar jobs — environmentalism with a side of America First.

There’s just one problem: It’s infuriated the United Auto Workers, which represents some 400,000 Americans employed in automotive manufacturing and other trades. The historically Democratic union has, in turn, refused to endorse Biden ahead of a contentious general election.

Two of Ford’s new plants will be in Kentucky and the third in Tennessee; facilities in these three states are notoriously challenging to organize thanks in part to anti-union state laws. To workers like Dan Vicente, a UAW regional director and machine operator in Pottstown, Pennsylvania, it’s a way that Ford can have its cake and eat it too. The auto giant can explore EV manufacturing without much risk to its bottom line, and save massively by avoiding union labor.

“[T]he Biden administration didn’t require any sort of guarantees of those jobs being UAW jobs or being any union jobs at all,” Vicente said on an Aug. 7 episode of Bloomberg’s Odd Lots podcast. “They basically just said, ‘Hey Ford, please be nice to these workers and let them have a vote if you feel like it.’ And so we don’t find that acceptable.”

American businesses and their employees are in an unusual position. Partially thanks to new policy efforts, companies are expanding domestic manufacturing. But they’re finding an American worker who isn’t willing to work for cut-rate pay. Employees are increasingly fighting back on low wages, working hours and mediocre benefits — and are set to walk away from jobs entirely if the terms aren’t right.

An excitable soul might declare we’re in the midst of an American labor comeback after decades of neoliberal policies encouraged crony capitalism, union busting and general skulduggery. According to federal data, nearly 13 million Americans are employed in manufacturing work — the highest number we’ve seen since the Great Recession. The nearly 2 million Americans – ranging from university graduate students to UPS drivers to rail track maintenance workers — represented by Teamsters and the United Auto Workers unions are seeing more militant leadership than ever. And even anti-establishment publications like The Intercept are admitting that the center-left Biden administration has appointed “aggressive” pro-union leaders to the National Labor Relations Board, making organizing easier.

The majority of Americans said in a 2019 Pew survey that there’s “too much economic inequality,” and around 42% believed reducing it should be a “top priority.” Now, after the coronavirus pandemic brought about discourse about essential workers and stock buybacks, one could assume those percentages are even higher.

It seems like reality is reflecting those pro-union sentiments. Automotive workers began an unprecedented strike on Friday, stopping work at all three Detroit automakers for the first time in history. UPS workers got a major win this summer. And nearly 200,000 actors and screenwriters are on strike. American approval of labor unions just hit its highest point since 1965, according to a Gallup poll. For the first time ever, a sitting president is even supporting strikes.

Steven Greenhouse, a former longtime labor reporter at The New York Times, hesitated to say that we’re in a major uprising for American workers. However, he said conditions increasingly favor them.

It’s a bullish sign for the US economy — and freight volumes

During the Great Recession, the UAW was forced to make a slew of concessions to prevent the Big Three automakers from shuttering completely.

In the 2000s, American consumers were increasingly buying vehicles from European and Asian manufacturers as fuel prices soared. Ford and GM posted a combined loss of more than $30 billion in 2008. That trend has reversed entirely; Americans are eagerly buying up pricey pickup trucks and SUVs from domestic manufacturers, even as inflation slams household budgets. Those hefty vehicles have in turn boosted profits at Ford and GM; they made a combined $40 billion-plus last year alone. 

As a result, UAW workers are now seeking out a payday that reflects their employers’ windfalls. The UAW is calling for the reinstatement of pensions, retiree health care, cost-of-living adjustments to wages, along with a 40% raise spread over the next four years and the elimination of the two-tiered employment model. These demands aren’t necessarily autoworkers seeking to overturn the system; rather, they’re changes that would restore compensation to pre-2008 standards.

Marick Masters, a business professor at Wayne State University in Detroit, has studied labor relations since the 1970s. He said aims at the UAW and Teamsters alike have become “more socialistic in orientation.” He hasn’t seen leadership like the UAW’s Shawn Fain or the Teamsters’ Sean O’Brien in decades.

“[I]t has a different view of the role of profits and business and believes that labor has a rightful claim to a bigger piece of the pie,” Masters told FreightWaves. I think that both union leaders want the companies to do well so that they can help members. I would think that they would set that as a first priority, in terms of how they want to claim the profits for workers’ increased pay and other benefits.”

Business magnates may groan, but there’s a silver lining: A fired-up labor pool means American businesses are healthy. 

“[T]he pendulum has swung back from the 2008 recession, when companies could make a good case that they needed concessions, to a post-pandemic time when automakers’ profits are good and UPS profits are great,” Greenhouse told FreightWaves. “Workers can now say the time for concessions is over. It’s now the time for advances, the time for betterment, the time to make up for what [they] gave up in previous contracts.”

Growth in domestic manufacturing and infrastructure spending is a bullish indicator for freight volumes — even though the industry is presently in a decline. For example, FreightWaves data suggests that the increase in construction spurred by the Biden administration buoyed freight volumes in July 2023, a month that was expected to be weak for truckers amid a weakened consumer economy. If America is making more stuff in America, that means there’s more for truck drivers to haul.

Vicente of the UAW told Bloomberg in August that his colleagues are quitting their jobs to work at Dollar General or Walmart. Vicente’s employer manufactures plumbing, air-conditioning, steering systems and other equipment for boats, 18-wheelers and food trucks. Now, his former co-workers are finding themselves stocking shelves or scanning products — most likely mass-produced plastic stuff made overseas, clothing that will likely end up in a landfill in several months or processed food with little nutritional value.

Of course, one can’t discuss unionized work and the trucking industry without mentioning Yellow, which was the third-largest less-than-truckload company, employing some 22,000 Teamsters workers, until it closed operations in August. Yellow pinned the blame for its shutdown on the Teamsters. For months, the union refused to negotiate on a proposed change of operations. The Teamsters said unionized Yellow employees had given away some $5 billion in concessions to the company since 2008 and refused to cut further. Amid the fracas, the trucking giant eventually lost enough inbound freight volumes that it was unable to pay into a major Teamsters pension fund, triggering a strike authorization. That gutted Yellow’s freight volumes further.

J. Bruce Chan, a transportation analyst at the investment bank Stifel, previously said Teamsters may have been the “trigger” for Yellow’s bankruptcy, but the company had been troubled for about two decades. Yellow took on more than $1 billion in debt in the 2000s as it acquired more and more companies. It was never able to recover from those foolhardy purchases, gutted further by the Great Recession and other poorly timed business decisions.

While the Teamsters may evade some blame, former Yellow employees are baffled as to why the union allowed the company to shutter. Labor expert Michael Duff, a law professor at Saint Louis University, doesn’t believe Teamsters boss O’Brien risked those 22,000 jobs forever.

Rather, Duff said Teamsters likely anticipates increased manufacturing activity in the U.S. — particularly at unionized shops that will only work with organized trucking companies. That means more trucking companies organized with the Teamsters, whether existing unionized fleets grow or new ones join the union.

“I don’t think the union believes we’re going to lose those jobs and they’re never coming back,” Duff said. “Whatever else the Teamsters will be, they’re not stupid.”

Scheduling chaos

Many experts believe a key reason why striking and organizing activity is reaching a historic fervor is the renewed interest by Americans age 40 or younger. They’re old enough to see the issues resulting from rampant globalization and financialization but young enough to not recall, say, Jimmy Hoffa’s Mafia ties. Cornell University’s Kate Bronfenbrenner, who is the institution’s director of labor education research, said this change of opinion among millennials and Gen Zers is a key “turning point” for the labor movement.

“I do think we’re in a moment with public support, with this energy among young people and increased interest in organizing,” Bronfenbrenner told FreightWaves.

One shared demand among union organizers isn’t just around increased pay but more control over work rules. A 2008 New York Times article pointed out that a veteran UAW member made about $28 an hour at an American auto plant, compared to a well-paid Toyota worker in Kentucky earning around $25 an hour. But those workers have vastly different control over their schedules. And rail workers were set to strike in 2022 over having more predictable hours and flexible time off; they received zero days of paid sick leave until this year.

But firms say they need flexibility in scheduling, work rules and positions in order to remain competitive — especially when it comes to competing with nonunion shops. That tension was core to the Yellow-Teamsters dispute that eventually shuttered the company.

Yellow wanted to convert nearly 1,000 linehaul trucking jobs to so-called “utility driver” roles, where they would be expected to do more dock work and the pay was often less. The Teamsters union opposed that. The company fired back with a memo to disgruntled workers: “Let’s be clear: If you were at a non-union company — a very realistic possibility for MOST of you if Yellow does not survive — ALL of you would be subject to potential dock work regardless of your time in the industry.”

Feeling out of control over one’s schedule (and ultimately, one’s life) is what drives many workers to organize, said Bronfenbrenner.

“If they were organizing over money and the employer could just throw a couple of pennies their way, they could get rid of the union campaign,” Bronfenbrenner said. “But the primary reason workers organize tends to be arbitrary supervisor power and respect on the job — things like scheduling, where they can never know when they’re coming to work, which could make it impossible to deal with your children’s day care or do medical appointments.

“Money matters,” Bronfenbrenner added. “But, money is something that the employer can afford to pay if the union pushes them enough. Employers, particularly U.S. employers, don’t like to give up control. They like that they have this God-given right to manage free of any interference from government or unions or anybody else. Those are the things that affect the day-to-day life of workers.”

Regular scheduling was a game changer for Duff of Saint Louis University. During the 1980s and early 1990s, Duff was a claims prevention supervisor at Flying Tiger and then a fleet service agent at U.S. Airways.

In the mornings, every day from 8 a.m. to noon, he attended West Chester University. It took him a decade of blue-collar work, but Duff was able to secure his college degree. Four years after, he got his law degree from Harvard.

Tyler Durden Sun, 09/17/2023 - 21:45

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Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…



Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Congress’ failure so far to deliver on promise of tens of billions in new research spending threatens America’s long-term economic competitiveness

A deal that avoided a shutdown also slashed spending for the National Science Foundation, putting it billions below a congressional target intended to…



Science is again on the chopping block on Capitol Hill. AP Photo/Sait Serkan Gurbuz

Federal spending on fundamental scientific research is pivotal to America’s long-term economic competitiveness and growth. But less than two years after agreeing the U.S. needed to invest tens of billions of dollars more in basic research than it had been, Congress is already seriously scaling back its plans.

A package of funding bills recently passed by Congress and signed by President Joe Biden on March 9, 2024, cuts the current fiscal year budget for the National Science Foundation, America’s premier basic science research agency, by over 8% relative to last year. That puts the NSF’s current allocation US$6.6 billion below targets Congress set in 2022.

And the president’s budget blueprint for the next fiscal year, released on March 11, doesn’t look much better. Even assuming his request for the NSF is fully funded, it would still, based on my calculations, leave the agency a total of $15 billion behind the plan Congress laid out to help the U.S. keep up with countries such as China that are rapidly increasing their science budgets.

I am a sociologist who studies how research universities contribute to the public good. I’m also the executive director of the Institute for Research on Innovation and Science, a national university consortium whose members share data that helps us understand, explain and work to amplify those benefits.

Our data shows how underfunding basic research, especially in high-priority areas, poses a real threat to the United States’ role as a leader in critical technology areas, forestalls innovation and makes it harder to recruit the skilled workers that high-tech companies need to succeed.

A promised investment

Less than two years ago, in August 2022, university researchers like me had reason to celebrate.

Congress had just passed the bipartisan CHIPS and Science Act. The science part of the law promised one of the biggest federal investments in the National Science Foundation in its 74-year history.

The CHIPS act authorized US$81 billion for the agency, promised to double its budget by 2027 and directed it to “address societal, national, and geostrategic challenges for the benefit of all Americans” by investing in research.

But there was one very big snag. The money still has to be appropriated by Congress every year. Lawmakers haven’t been good at doing that recently. As lawmakers struggle to keep the lights on, fundamental research is quickly becoming a casualty of political dysfunction.

Research’s critical impact

That’s bad because fundamental research matters in more ways than you might expect.

For instance, the basic discoveries that made the COVID-19 vaccine possible stretch back to the early 1960s. Such research investments contribute to the health, wealth and well-being of society, support jobs and regional economies and are vital to the U.S. economy and national security.

Lagging research investment will hurt U.S. leadership in critical technologies such as artificial intelligence, advanced communications, clean energy and biotechnology. Less support means less new research work gets done, fewer new researchers are trained and important new discoveries are made elsewhere.

But disrupting federal research funding also directly affects people’s jobs, lives and the economy.

Businesses nationwide thrive by selling the goods and services – everything from pipettes and biological specimens to notebooks and plane tickets – that are necessary for research. Those vendors include high-tech startups, manufacturers, contractors and even Main Street businesses like your local hardware store. They employ your neighbors and friends and contribute to the economic health of your hometown and the nation.

Nearly a third of the $10 billion in federal research funds that 26 of the universities in our consortium used in 2022 directly supported U.S. employers, including:

  • A Detroit welding shop that sells gases many labs use in experiments funded by the National Institutes of Health, National Science Foundation, Department of Defense and Department of Energy.

  • A Dallas-based construction company that is building an advanced vaccine and drug development facility paid for by the Department of Health and Human Services.

  • More than a dozen Utah businesses, including surveyors, engineers and construction and trucking companies, working on a Department of Energy project to develop breakthroughs in geothermal energy.

When Congress shortchanges basic research, it also damages businesses like these and people you might not usually associate with academic science and engineering. Construction and manufacturing companies earn more than $2 billion each year from federally funded research done by our consortium’s members.

A lag or cut in federal research funding would harm U.S. competitiveness in critical advanced technologies such as artificial intelligence and robotics. Hispanolistic/E+ via Getty Images

Jobs and innovation

Disrupting or decreasing research funding also slows the flow of STEM – science, technology, engineering and math – talent from universities to American businesses. Highly trained people are essential to corporate innovation and to U.S. leadership in key fields, such as AI, where companies depend on hiring to secure research expertise.

In 2022, federal research grants paid wages for about 122,500 people at universities that shared data with my institute. More than half of them were students or trainees. Our data shows that they go on to many types of jobs but are particularly important for leading tech companies such as Google, Amazon, Apple, Facebook and Intel.

That same data lets me estimate that over 300,000 people who worked at U.S. universities in 2022 were paid by federal research funds. Threats to federal research investments put academic jobs at risk. They also hurt private sector innovation because even the most successful companies need to hire people with expert research skills. Most people learn those skills by working on university research projects, and most of those projects are federally funded.

High stakes

If Congress doesn’t move to fund fundamental science research to meet CHIPS and Science Act targets – and make up for the $11.6 billion it’s already behind schedule – the long-term consequences for American competitiveness could be serious.

Over time, companies would see fewer skilled job candidates, and academic and corporate researchers would produce fewer discoveries. Fewer high-tech startups would mean slower economic growth. America would become less competitive in the age of AI. This would turn one of the fears that led lawmakers to pass the CHIPS and Science Act into a reality.

Ultimately, it’s up to lawmakers to decide whether to fulfill their promise to invest more in the research that supports jobs across the economy and in American innovation, competitiveness and economic growth. So far, that promise is looking pretty fragile.

This is an updated version of an article originally published on Jan. 16, 2024.

Jason Owen-Smith receives research support from the National Science Foundation, the National Institutes of Health, the Alfred P. Sloan Foundation and Wellcome Leap.

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What’s Driving Industrial Development in the Southwest U.S.

The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse…



The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse panel of executives in industrial real estate this week at NAIOP’s I.CON West in Long Beach, California. Led by Dawn McCombs, principal and Denver lead industrial specialist for Avison Young, the panel tackled some of the biggest issues facing the sector in the Western U.S. 

Starting with the pandemic in 2020 and continuing through 2022, McCombs said, the industrial sector experienced a huge surge in demand, resulting in historic vacancies, rent growth and record deliveries. Operating fundamentals began to normalize in 2023 and construction starts declined, certainly impacting vacancy and absorption moving forward.  

“Development starts dropped by 65% year-over-year across the U.S. last year. In Q4, we were down 25% from pre-COVID norms,” began Megan Creecy-Herman, president, U.S. West Region, Prologis, noting that all of that is setting us up to see an improvement of fundamentals in the market. “U.S. vacancy ended 2023 at about 5%, which is very healthy.” 

Vacancies are expected to grow in Q1 and Q2, peaking mid-year at around 7%. Creecy-Herman expects to see an increase in absorption as customers begin to have confidence in the economy, and everyone gets some certainty on what the Fed does with interest rates. 

“It’s an interesting dynamic to see such a great increase in rents, which have almost doubled in some markets,” said Reon Roski, CEO, Majestic Realty Co. “It’s healthy to see a slowing down… before [rents] go back up.” 

Pre-pandemic, a lot of markets were used to 4-5% vacancy, said Brooke Birtcher Gustafson, fifth-generation president of Birtcher Development. “Everyone was a little tepid about where things are headed with a mediocre outlook for 2024, but much of this is normalizing in the Southwest markets.”  

McCombs asked the panel where their companies found themselves in the construction pipeline when the Fed raised rates in 2022.   

In Salt Lake City, said Angela Eldredge, chief operations officer at Price Real Estate, there is a typical 12-18-month lead time on construction materials. “As rates started to rise in 2022, lots of permits had already been pulled and construction starts were beginning, so those project deliveries were in fall 2023. [The slowdown] was good for our market because it kept rates high, vacancies lower and helped normalize the market to a healthy pace.” 

A supply imbalance can stress any market, and Gustafson joked that the current imbalance reminded her of a favorite quote from the movie Super Troopers: “Desperation is a stinky cologne.” “We’re all still a little crazed where this imbalance has put us, but for the patient investor and owner, there will be a rebalancing and opportunity for the good quality real estate to pass the sniff test,” she said.  

At Bircher, Gustafson said that mid-pandemic, there were predictions that one billion square feet of new product would be required to meet tenant demand, e-commerce growth and safety stock. That transition opened a great opportunity for investors to run at the goal. “In California, the entitlement process is lengthy, around 24-36 months to get from the start of an acquisition to the completion of a building,” she said. Fast forward to 2023-2024, a lot of what is being delivered in 2024 is the result of that chase.  

“Being an optimistic developer, there is good news. The supply imbalance helped normalize what was an unsustainable surge in rents and land values,” she said. “It allowed corporate heads of real estate to proactively evaluate growth opportunities, opened the door for contrarian investors to land bank as values drop, and provided tenants with options as there is more product. Investment goals and strategies have shifted, and that’s created opportunity for buyers.” 

“Developers only know how to run and develop as much as we can,” said Roski. “There are certain times in cycles that we are forced to slow down, which is a good thing. In the last few years, Majestic has delivered 12-14 million square feet, and this year we are developing 6-8 million square feet. It’s all part of the cycle.”  

Creecy-Herman noted that compared to the other asset classes and opportunities out there, including office and multifamily, industrial remains much more attractive for investment. “That was absolutely one of the things that underpinned the amount of investment we saw in a relatively short time period,” she said.  

Market rent growth across Los Angeles, Inland Empire and Orange County moved up more than 100% in a 24-month period. That created opportunities for landlords to flexible as they’re filling up their buildings. “Normalizing can be uncomfortable especially after that kind of historic high, but at the same time it’s setting us up for strong years ahead,” she said. 

Issues that owners and landlords are facing with not as much movement in the market is driving a change in strategy, noted Gustafson. “Comps are all over the place,” she said. “You have to dive deep into every single deal that is done to understand it and how investment strategies are changing.” 

Tenants experienced a variety of challenges in the pandemic years, from supply chain to labor shortages on the negative side, to increased demand for products on the positive, McCombs noted.  

“Prologis has about 6,700 customers around the world, from small to large, and the universal lesson [from the pandemic] is taking a more conservative posture on inventories,” Creecy-Herman said. “Customers are beefing up inventories, and that conservatism in the supply chain is a lesson learned that’s going to stick with us for a long time.” She noted that the company has plenty of clients who want to take more space but are waiting on more certainty from the broader economy.  

“E-commerce grew by 8% last year, and we think that’s going to accelerate to 10% this year. This is still less than 25% of all retail sales, so the acceleration we’re going to see in e-commerce… is going to drive the business forward for a long time,” she said. 

Roski noted that customers continually re-evaluate their warehouse locations, expanding during the pandemic and now consolidating but staying within one delivery day of vast consumer bases.  

“This is a generational change,” said Creecy-Herman. “Millions of young consumers have one-day delivery as a baseline for their shopping experience. Think of what this means for our business long term to help our customers meet these expectations.” 

McCombs asked the panelists what kind of leasing activity they are experiencing as a return to normalcy is expected in 2024. 

“During the pandemic, shifts in the ports and supply chain created a build up along the Mexican border,” said Roski, noting border towns’ importance to increased manufacturing in Mexico. A shift of populations out of California and into Arizona, Nevada, Texas and Florida have resulted in an expansion of warehouses in those markets. 

Eldridge said that Salt Lake City’s “sweet spot” is 100-200 million square feet, noting that the market is best described as a mid-box distribution hub that is close to California and Midwest markets. “Our location opens up the entire U.S. to our market, and it’s continuing to grow,” she said.   

The recent supply chain and West Coast port clogs prompted significant investment in nearshoring and port improvements. “Ports are always changing,” said Roski, listing a looming strike at East Coast ports, challenges with pirates in the Suez Canal, and water issues in the Panama Canal. “Companies used to fix on one port and that’s where they’d bring in their imports, but now see they need to be [bring product] in a couple of places.” 

“Laredo, [Texas,] is one of the largest ports in the U.S., and there’s no water. It’s trucks coming across the border. Companies have learned to be nimble and not focused on one area,” she said. 

“All of the markets in the southwest are becoming more interconnected and interdependent than they were previously,” Creecy-Herman said. “In Southern California, there are 10 markets within 500 miles with over 25 million consumers who spend, on average, 10% more than typical U.S. consumers.” Combined with the port complex, those fundamentals aren’t changing. Creecy-Herman noted that it’s less of a California exodus than it is a complementary strategy where customers are taking space in other markets as they grow. In the last 10 years, she noted there has been significant maturation of markets such as Las Vegas and Phoenix. As they’ve become more diversified, customers want to have a presence there. 

In the last decade, Gustafson said, the consumer base has shifted. Tenants continue to change strategies to adapt, such as hub-and-spoke approaches.  From an investment perspective, she said that strategies change weekly in response to market dynamics that are unprecedented.  

McCombs said that construction challenges and utility constraints have been compounded by increased demand for water and power. 

“Those are big issues from the beginning when we’re deciding on whether to buy the dirt, and another decision during construction,” Roski said. “In some markets, we order transformers more than a year before they are needed. Otherwise, the time comes [to use them] and we can’t get them. It’s a new dynamic of how leases are structured because it’s something that’s out of our control.” She noted that it’s becoming a bigger issue with electrification of cars, trucks and real estate, and the U.S. power grid is not prepared to handle it.  

Salt Lake City’s land constraints play a role in site selection, said Eldridge. “Land values of areas near water are skyrocketing.” 

The panelists agreed that a favorable outlook is ahead for 2024, and today’s rebalancing will drive a healthy industry in the future as demand and rates return to normalized levels, creating opportunities for investors, developers and tenants.  

This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at or

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