While, recent economic data may be mixed and the outlook murky, the warehouse real estate picture depicts a continuing boom in supply chain management services.
One recent trend manifesting itself is the move to smaller distribution centers, driven by the growth of ecommerce, Prologis Chairman and CEO Hamid Moghadam said in an interiview with the Wall Street Journal.
That doesn’t mean that companies are abandoning larger facilities, Moghadam noted. Prologis’ buildings of 500,000 square feet or more –mainly distribution facilities for retail companies – have been at a near-capacity 98% occupancy rate over the past four years.
This stems from ecommerce firms attempting to reduce costs by shrinking the number of large distribution centers they operate, he observed. Although for several years small warehouse occupancy rate for Prologis proporties was stuck at about 89%, over the last year that number has
climbed to 95%.
A Sick Leave Mandate For Federal Contractors
President Obama is expected to issue another in a stream of executive orders telling companies that perform contract work for the federal government how to run their businesses, this time requiring them to provide paid sick leave to their employees.
According to news reports, the order will require federal contractors and their subcontractors to allow unused paid sick leave to accrue year after year Employers also would not be permitted to require an employee to find a fellow worker to replace him or her on a particular shift in order to use paid leave.
The order also is expected to allow paid sick leave to be used for an employee’s own illness or that of a family member and would also apply to absences related to domestic violence, sexual assault or stalking of the employee.
NLRB Decision Rules Firms Joint Employers
Companies are now considered joint employers with staff leasing firms under federal labor law, according to a decision handed down by the National Labor Relations Board.
Under this joint employer doctrine, a company can be found liable for its staffing firm’s unfair labor practices, along with breaches of collective bargaining agreements.
For the last 30 years, the board has determined whether two companies are joint employers by assessing whether they exert enough direct and significant control over the same employees to share or codetermine matters regarding essential terms and conditions of employment.
Imports Up; ‘Chaos’ Checks Ocean Rates
Retail import cargo volume at the nation’s major container ports is seen rising 3.6% in August over the same time last year as retailers begin to bring in merchandise for the holiday season.
The National Retail Federation and Hackett Associates report that imports for the year are expected to be up 4.2% over 2014.
Consumers might be out buying back-to-school supplies but toys and sweaters are starting to show up on the docks, NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said.
There are still some lingering congestion issues, but retailers are working with their supply chain partners to make sure all of that merchandise flows smoothly to store shelves.
Some retailers are paying less to transport their merchandise this year, thanks to the use of more large-capacity ships by ocean carriers, NRF said. Hackett Associates Founder Ben Hackett said the increased capacity has driven down rates, but the relief could be short-lived because some lines have already canceled voyages to counteract the trend.
“We are seeing complete chaos on the high seas in terms of the amount of capacity available and the level of spot freight rates,” he said. “One has to wonder why carriers cannot match supply to demand. The result will likely be a highly volatile situation of freight rates moving up and down.