Prologis Research tapped into decades of industry experience, proprietary data, and unique property and customer insights to predict seven supply chain trends for 2025. The previous years’ edition of the predictions from Prologis, a global logistics real estate leader, provided a reliable source of trends with 6 out of 7 predictions for 2024 made correctly. The seven trends provide insights into what to expect during this year in the global supply chain. Three out of seven predictions are especially relevant for European and Poland markets.
1.Freight will fly
Prologis Research predicts a continued increase in the volume of cargo transported by air in 2025. In September 2024, air cargo volumes rose by 9.4% year-over-year. In some months of the past year, double-digit growth was recorded compared to the same periods in 2023. The growth of cross-border e-commerce and disruptions in ocean shipping have created a demand for faster and safer transportation of goods from production sites to end customers, further strengthening this trend.
“Companies in the logistics real estate sector will respond to the increasing volume of air cargo by offering warehouses located near major airports. In Central Europe, Prologis’ portfolio includes, for instance, Prologis Park Janki, which is just 15 kilometers from Warsaw’s Chopin Airport. Last year, we also expanded our presence in Prague by opening a new warehouse in Prologis Park Prague-Chrášťany, located just a 10-minute drive from Václav Havel Airport,” said Paweł Sapek, SVP, Regional Head for Central Europe at Prologis.
2. All quiet on the construction front
Global development starts of logistics facilities will remain 15% below historic levels, whilst the long-term market fundamentals remain strong. Construction material costs in Europe are expected to decline slightly, resulting in an improvement to development economics and margins.
“At Prologis, we place great importance on the quality and efficiency of our property portfolio management. With limited development activity, this becomes even more important. This approach allows us to maintain the high quality of our properties for years to come, and enables our customers to make optimal use of our facilities” - comments Pawel Sapek - ”What's more, despite many market challenges, last year, among other things, we started construction of a new facility of over 41,000 sqm, which will become a distribution center for the Dell Technologies factory in Lodz, Poland” - he added.
3. Better together: Freight industry consolidation will accelerate
M&A activity will intensify and drive technology investment and the next wave of expansion in the freight business. The freight transport industry will consolidate as larger companies will be better positioned to face the upcoming challenges. In parallel, investments in technology which improve operational efficiency will continue, including in Europe. In the EU the main focus will be sustainable technologies.
“The freight transportation sector, like other industries, will be required to invest in sustainable technologies. This is driven both by EU regulations, such as the new ESG reporting rules, as well as growing expectations from customers and investors. Customers expect logistics real estate providers to offer modern, high-quality and energy-efficient spaces. That's why, in Poland, all new Prologis warehouses are certified to BREEAM requirements of at least Excellent. This means that our newly constructed facilities meet more than 70% of the environmental performance requirements of the advanced building rating system” - Pawel Sapek stressed.
Other predictions for the supply chain for the year to come include:
- Bulk space will rebalance first: Vacancy rates will fall the fastest for the largest buildings in the U.S. A combination of increasing demand and limited new supply will push vacancy rates down by 100 bps or more for buildings 500,000 square feet (approx. 46.5 thousand sqm) or larger.
- South America’s turn to take the stage: Brazil’s logistics real estate rent growth will surpass the global average by more than 500 bps as vacancy rates fall to never-before-seen mid-single digits.
- California’s domino effect: New legislation will seek to limit new supply in key locations. Following the passage of State Bill AB98 in California, we expect other states to propose similar measures in 2025.
- No slowdown in global trade: U.S. imports will grow faster than GDP despite new tariffs and the East Coast will take a larger share post-International Longshoreman Association (ILA) contract ratification.
For the full list of global supply chain predictions, the in-depth analysis and the last year’s prediction summary, please visit the global Prologis press office website.