One sign that ecommerce is thriving is the demand for packing materials. A new report reveals the demand is so great that companies that produce corrugated boxes and other packaging are expanding their industrial real estate footprint through heightened leasing and merger/acquisition activity to meet the increased demand.
Newmark Group, a commercial real estate services firm, found that nationally, nearly 407 billion square feet of corrugated product was churned out in 2020 as online orders spiked during the pandemic – an all-time high.
It expects demand to remain elevated, and said, based on current space utilization of top corrugated occupiers, it estimates that an extra 250,000 square feet of direct industrial space for every additional 1.0 billion square feet of corrugated product could be needed to accommodate annual growth.
The report plots out box consumption over time from 2011 – 2020, overlaying US corrugated box shipments (SF) with ecommerce sales.
It also lists suppliers (“tenants”), from Uline to Georgia-Pacific and Shorr Packaging, showing the growth of their new warehouse locations in square feet from 2020 to 2021 year-to-date.
The growth of ecommerce increased the need for certain types of packaging, including corrugated boxes, which represent more than 80% of online-order packaging, Newmark said.
You can find the report on its website, nmrk.com.