Online Sales/Returns Creating Growing Reverse Logistics Problems

By Steve Triolet, Younger Partners Director of Research

The Dallas-Fort Worth industrial market continues to perform well, thanks to the Metroplex’s robust job and population growth and the continued strength of the regional and U.S. economy. The market continues to deliver an incredible amount of industrial supply.

The metroplex has averaged more than 20 million SF of net new supply annually over the past few years. In 2019 alone, the DFW market has added 27.1 million SF of new industrial product (flex properties not included), with another 30.5 million SF currently underway.  This is driven by a number of factors.  First is just sheer population growth (DFW has seen more population growth than any other metro area over the past several years), but in addition to local population growth, DFW serves as a regional distribution hub for a good portion of south central United States, particularly for online retailers (Amazon, Wayfair, etc.).

As online sales has continued to boom, there’s been an inevitable side effect: more merchandise is getting returned, boosting costs and complexity for retailers and increasing the need for additional warehouse space.  See the slides  below that give further info. on this trend.