Prologis: U.S. Strategic Gateway Logistics Markets Set for Strong Rebound by 2026

The latest outlook report from Prologis forecasts that demand for warehousing at key U.S. port gateways will shake off the recent downturn and hit a three-year high in 2026, driven by a resurgence in e-commerce and rising trucking cost pressures.

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Demand for logistics space at key U.S. gateway markets is positioned to move past the recent downturn and reach a three-year high in 2026. This is the key takeaway from the latest outlook report by the world’s leading warehouse operator, Prologis (NYSE: PLD).

Strategic coastal markets such as the Inland Empire and New Jersey are projected to experience a robust recovery. Availability in markets serving these dense population centers has improved, and warehouse rents have reset from their previous peaks.

“Looking ahead, these conditions will allow for increased demand as customers shift inventory closer to consumption to mitigate transportation costs and improve service levels,” the report noted.

Trucking Pressures Drive Warehousing Demand

Prologis points out that increasingly stringent regulations in the trucking industry are reducing capacity and pushing rates higher. This compels tenants to forward deploy inventory closer to end-users to shorten delivery distances and cut transportation costs.

“Shrinking trucking capacity will drive double-digit freight hikes in 2026, making transportation an even larger share of total supply chain spend and amplifying the value of well-located logistics real estate,” the report emphasized.

Utilization Rates and E-commerce Dynamics

U.S. warehouse utilization is expected to reach expansionary levels (85.5%) next year. Recent growth has been driven by basic goods, e-commerce, and the manufacturing sector. The report suggests that current trends mirror previous periods of "rapid reabsorption" (2014–2015 and 2021–2022).

Prologis expects e-commerce players to account for nearly 25% of new leasing activity in 2026 as global e-commerce penetration nears the 20% mark of total retail sales.

However, the strategy within the U.S. is diverging due to the termination of the de minimis exemption for low-value shipments. Domestic e-commerce players will continue to seek better onshore inventory positioning with rapid regional fulfillment capabilities. Meanwhile, Asian e-commerce players are pivoting their expansion focus toward Europe and Latin America.

Energy and Defense: New Variables

Prologis predicts that the availability of power sufficient for both advanced automation and manufacturing will become a top-three site selection factor. Fully automated warehouses consume three to five times the amount of electricity compared to the baseline models of yesteryear.

Additionally, rising defense spending in the U.S. and Europe is generating significant demand. Subcontractors are actively seeking real estate near prime contractors to localize and streamline supply chains, supporting demand in legacy industrial corridors.

International Markets Outperform

Prologis stated that international markets are likely to outperform the U.S. The company's global forecast includes a fourth consecutive year of double-digit rent growth in Brazil (projected at 11.5% in 2025), vacancy rates below 5% in Europe, and outsized growth in logistics infrastructure in India.

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