Jones Lang LaSalle
Blame it on Eisenhower Zhigang Tang, Economist
March 3, 2006 Volume 7, Number 8
ztang@tortowheatonresearch.com
Did you ever have the feeling that the distribution market is a great deal more complicated that it used to be? Well, it is; and it's not just because of trade with China. In the early and middle 20th century, boats and trains were the main transportation methods. Warehouses--distribution centers in particular--were accordingly located near ports and railroads. Significant changes began in 1956 when President Eisenhower signed legislation that created the Federal Interstate Highway system. Today, most commodities are transported by trucks along our extensive highway system. A warehouse can be just about anywhere there is an off-ramp.
One way to gauge future demand for warehouse space, then, might be to examine the highways that service each market. With data from the Federal Highway Administration (FHA) and a little help from our GIS software, we are able to map the highway system and truck flow. The following map shows the projected change of truck flow between 1998 to 2010. The data is interesting in that some roads are expected to see significant increases in traffic (>50%, marked in red) while still others will see little. In fact, a few are actually expected to see some declines (marked in purple)!
Using this information, we can locate the intersections of two or more red highways and call these intersections "Hot Spots" (marked with a blue star). If the FHA's projections are accurate, we will see sharp increases in truck flows and warehouse demand at these Hot Spots in the years ahead.
Now, this is not to say that this is the only way to consider industrial markets. We take into account many factors, including detailed market-by-market trends and conditions, as well as increasingly important factors such as access to ports and regional industrial structures. Nonetheless, since the FHA has gone to the trouble of creating this data resource, it is tempting to see just how the Hot Spots that we've identified correlate with TWR's industrial outlook. The results are shown in the chart below.
Blame it on Eisenhower Zhigang Tang, Economist
March 3, 2006 Volume 7, Number 8
ztang@tortowheatonresearch.com
Did you ever have the feeling that the distribution market is a great deal more complicated that it used to be? Well, it is; and it's not just because of trade with China. In the early and middle 20th century, boats and trains were the main transportation methods. Warehouses--distribution centers in particular--were accordingly located near ports and railroads. Significant changes began in 1956 when President Eisenhower signed legislation that created the Federal Interstate Highway system. Today, most commodities are transported by trucks along our extensive highway system. A warehouse can be just about anywhere there is an off-ramp.
One way to gauge future demand for warehouse space, then, might be to examine the highways that service each market. With data from the Federal Highway Administration (FHA) and a little help from our GIS software, we are able to map the highway system and truck flow. The following map shows the projected change of truck flow between 1998 to 2010. The data is interesting in that some roads are expected to see significant increases in traffic (>50%, marked in red) while still others will see little. In fact, a few are actually expected to see some declines (marked in purple)!
Using this information, we can locate the intersections of two or more red highways and call these intersections "Hot Spots" (marked with a blue star). If the FHA's projections are accurate, we will see sharp increases in truck flows and warehouse demand at these Hot Spots in the years ahead.
Now, this is not to say that this is the only way to consider industrial markets. We take into account many factors, including detailed market-by-market trends and conditions, as well as increasingly important factors such as access to ports and regional industrial structures. Nonetheless, since the FHA has gone to the trouble of creating this data resource, it is tempting to see just how the Hot Spots that we've identified correlate with TWR's industrial outlook. The results are shown in the chart below.
posted by Jones Lang LaSalle NJ News Blog at 3:01 PM
<< Home