“Making your operations ‘greener’ and making
them more economical are complementary, not contradictory,” Eric Riddleberger, global leader for IBM’s
business strategy consulting practice, said in a statement. “When you improve the overall efficiency of a
system, you can almost automatically lower cost,
waste, and environmental impact.”
Wright emphasizes that while the supply chain is the
most “addressable area” for companies reducing their
carbon footprint, the bulk of greenhouse gas emissions occur during the extraction of raw materials
from the ground and the subsequent initial manufacturing process. IBM spokesman Jay Cadmus admits
that most of the company’s efforts on SNOW have
been focused on “back-end logistics.”
—Mark Solomon
accolades
Taking charge of its environment. EnerSys, a manufacturer of industrial battery products, has won the
Industrial Pretreatment Award from the Kentucky-Tennessee Water Environment Association. The award
is given for outstanding performance in the pretreatment of industrial wastewater and recognizes the
work done at the EnerSys manufacturing plant in
Richmond, Ky. The facility processes 30,000 to 50,000
gallons of water each day through its filtration system
and now recycles some 80 percent of its waste sulfuric acid. In 2008, the plant also recycled 210,000
pounds of lead that was extracted from its wastewater.
Carry it home. The Virginia Port Authority (VPA) has
earned its fourth consecutive Sustained Distinguished
Performance award from the Elizabeth River Project.
The award recognizes the VPA’s continuing efforts to
keep the Elizabeth River (Virginia) and its surrounding
environment clean. The VPA, which has implemented
an Environmental Management System and achieved
an ISO 14001 certification, has also replaced its existing locomotive fleet with a hybrid locomotive and two
ultra low-emission locomotives.
Repeat recognition. A.R. Williams Material Handling
has been selected as Clark Material Handling Co.’s
Dealer of the Year for 2008. A.R. Williams is based in
Calgary, Alberta, with locations throughout Alberta,
Manitoba, and Saskatchewan. This is the second time
the dealer, which has represented Clark for over four
decades, has been recognized as Dealer of the Year.
weak year ahead for warehouses and DCs
It’s not going to come as a shock, but the 2009 outlook for
U.S. warehousing and distribution center property isn’t looking very rosy.
According to forecasts for 58 U.S. markets issued by CBRE
Torto Wheaton Research, the commercial research unit of real
estate giant CB Richard Ellis Group Inc., the availability of industrial property space will increase this year compared to last. At
the same time, project completions are expected to decline
almost across the board. In markets that have been hit hard by
the real estate downturn, the drop-off will be dramatic.
The research firm projects that available industrial space—
two-thirds of which consists of warehouses and DCs—will climb to
12. 6 percent from 11. 4 percent in 2008. Square footage completed in 2009 will decline to 66.6 million square feet from
168.9 million square feet.
The projections include eye-popping numbers for some
markets. In Chicago, completions will fall to 4 million square
feet from 17. 3 million in 2008. In Atlanta, completions will
drop to 1. 25 million square feet from 5. 9 million. In Phoenix,
2. 3 million square feet will be completed in 2009, down from
10.6 million. And in Riverside, Calif., the downturn will reduce
completions to 5. 5 million square feet from nearly 25 million
square feet. Not surprisingly, some of the sharpest declines
are expected in markets where the real estate boom-and-bust
cycle has been most pronounced.
Torto Wheaton researchers caution that the 2009 completions estimates must be put in context, noting that last year’s
completions figures represented the culmination of several
years of rapid growth in many markets.
Stephen L. Blau, director of corporate services for NAI Mertz
Corporate Services, a Mount Laurel, N.J.-based supply chain
and site selection firm, says the commercial market as a
whole shows no signs of stabilizing, although the industrial
sector is doing better than categories like retail and hospitality. “There are still positive things happening. Buildings are
being leased or sold. But the market generally is what I would
call balanced on the edge of uncertainty,” he says.
Blau also says the weak economy and tougher loan underwriting standards are causing a “systemic decline” in property
values and may make it impossible to refinance many commercial mortgages that will be reset this year. Because commercial real estate trends tend to lag the residential side by six
to 12 months, Blau says, the market is just now seeing the first
wave of commercial mortgage foreclosures.
Two winners in this gloomy scenario may be renters and
those with enough working capital to snap up marked-down
assets. Torto Wheaton forecasts average 2009 rents in the
markets surveyed will be $5.89 per square foot, down from
$6.03 in 2008. As for the bottom fishers, Blau says those who
have been waiting for a time to buy at the lows should be
ready for action. “It’s here,” he says.
