Warehouse capacity resilient in the face of shipper frontloading

Although many shippers in recent months have pulled cargo forward to mitigate port labor concerns and new tariffs from the Trump administration, experts say warehouse capacity has not been overly taxed.

While frontloading isn’t new, it became a prominent strategy in 2024 due to the crisis in the Red Sea, labor unrest at East and Gulf Coast ports and drought issues at the Panama Canal.

When it comes to port strike mitigation, while there was a limit to the ability to frontload retail goods, shippers focused on key product categories that could be most immediately impacted, according to Jonathan Gold, VP of supply chain and customs policy at the National Retail Federation.

“Many are in a good place and did not overreact to bring in too much excess cargo,” he said in an email to Supply Chain Dive in January.

Now increasing tariffs from the Trump administration are prompting shippers to continue the trend.

“Imports at the nation’s major container ports are expected to remain high as retailers continue to bring in cargo ahead of growing tariffs on China and threats against other countries,” the National Retail Federation and Hackett Associates said in a Feb. 7 press release.

Tariffs on U.S. neighbors Canada and Mexico, that are set to go into effect March 4, may have minimal impact at ports since most cross-border imports move by other freight modes, but over time it could create an increase in maritime imports to the U.S., Hackett Associates Founder Ben Hackett said in the release.

Warehouse space is not under constraint

John Morris, Americas President for CBRE’s Industrial and Logistics business, said warehouse capacity has been marginally pressured by some frontloading of cargo, although not to a concerning degree.

“On average, however, there has not been a significant, market-altering level of capacity constraint that can be attributed to this marginal increase in volume,” Morris said in an email to Supply Chain Dive.

Looking at a high traffic area for imports like Southern California, there are more than 2 billion square feet of warehousing, distribution and fulfillment center space in the region, Port of Los Angeles Executive Director Gene Seroka said during a press briefing on Feb 19.

“The experts in this part of our business segment are very confident that we can handle the cargo coming through even at these heightened levels,” Seroka said.

Despite readily available existing warehousing, there is a growing need for new facilities as well, Morris added, as third-party logistics providers working with importers have been leasing more new buildings at a significantly above-average level.

“These companies have been accounting for 20% of 3PL warehouse demand over the near terms. In larger port markets, like Los Angeles and New Jersey, however, they had represented as much as a third of all warehouse space leased,” Morris said.

Post-pandemic investments paying off

Measures taken since the COVID-19 pandemic have allowed for a more resilient warehouse sector in the U.S., according to experts.

“During the pandemic we saw a serious shortage of warehousing space, but there has been investment and construction over the past few years which allowed for frontloading efforts,” Hackett said in an email to Supply Chain Dive.

Companies have been able to successfully de-stock and sell through inventory in the years since the pandemic, creating a softening in the warehouse market, William Jansen, director of customs brokerage and account management …