Trade in Flux: What Global Shifts Mean for U.S. Logistics Real Estate (2025)

From Prologis Research: Global trade policy is in flux, creating real-time challenges for supply chains. In response, Prologis Research is launching a white paper series to anchor the conversation in facts. Drawing on our global data and direct customer feedback, this first paper examines how goods move, where trade friction is hitting hardest and what it means for logistics real estate. Future papers will cover other direct impacts to logistics real estate—specifically, the increase to replacement costs and associated required rent—and implications of trade policy as it solidifies. Our goal: to bring clarity to an evolving landscape and identify where demand may shift next.

Rapid shifts in trade policy and economic conditions underscore the need to assess potential exposure within the U.S. logistics real estate market. Prologis Research continues to find that most logistics real estate demand is insulated from trade-related shocks. As outlined in papers dating back more than a decade, this resilience stems from the concentration of facilities in consumer-oriented markets, which developed to primarily serve domestic consumption and regional distribution, not global trade. Accordingly, changes in trade policy are likely to have only a modest impact on the broader logistics real estate landscape. This paper outlines four key frameworks that help decipher the impact of future trends:

(i) Logistics real estate functions along the supply chain,
(ii) Market by market trade dependency,
(iii) Import reliance by source of origin for logistics users, and
(iv) Customer feedback.

Key takeaways:

Most U.S. logistics demand is insulated from trade shocks. 75% of logistics real estate demand is tied to regional distribution and local consumption compared to a fraction of properties that are trade oriented.ⁱ
Trade-oriented markets are highly concentrated. Real estate in markets like Savannah, Georgia and Memphis, Tennessee, are the most exposed. Port markets like Southern California and New Jersey have exposure, but less than many might expect.
Import exposure is lower than it appears. Industries weighted by logistics real estate footprints skew toward essentials and domestic sourcing, with limited reliance on China and high price inelasticity.
Customers are delaying decisions. Uncertainty, not tariffs themselves, is slowing leasing activity and prompting interest in shorter, more flexible terms. Customers report they remain focused on growth initiatives and are moving through analysis stages, preparing to act as clarity emerges.
Short-term measures are driving demand for flexible solutions. Companies are pursuing overflow space, third party logistics (3PL) assistance and Foreign Trade Zones (FTZ) as stopgap tools to navigate volatility.
Supply chain diversification, including nearshoring is rising gradually. Mexico and Asia ex-China are gaining U.S. import share,ⁱⁱ but most structural investments remain two to five years out as companies await clearer policy signals.

I) Location Strategy

Logistics real estate spans a wide range of supply chain strategies and locations. In the diagram below, goods flow from left to right from where they are produced to where they are ultimately consumed, highlighting which segments are most exposed to disruption.

On the production end, supply chains evolve continuously, shaped by advances in technology, shifting cost structures and changing terms of trade.
At the consumption end, demand is more stable. Most goods are consumed in major metropolitan areas, and demand grows alongside populations and economies. These locations also face increasing land scarcity and more restrictive planning environments due to high competition among land uses.
In the middle, import centers and regional distribution facilities are essential links to carry goods from production to consumption. This segment has expanded rapidly as supply chains have grown increasingly complex.

Approximately 75% of logistics demand in the U.S. is tied to the consumption end of the supply chain compared to 15% that is trade specific (remaining 10% is services, manufacturing, research and development, among other uses).ⁱ Though high-profile, trade-oriented hubs such as ports and intermodal facilities are critical components of the supply chain, domestic consumption drives the bulk of logistics activity—including e-commerce fulfillment, retail restocking, and food and beverage distribution. Over the past decade, structural shifts such as the rise of just-in-case inventory strategies and growing demand for last-mile delivery only deepened this trend.

II) Market Trade Dependency

Prologis Research’s proprietary Modern Logistics Concentration metric, originally developed in 2015, quantifies a market’s position along the supply chain and illuminates their demand profile by comparing modern logistics real estate space to the number of local consumer households:

Local consumption markets typically have 50 to 90 square feet per householdⁱwith high-income markets showing even greater scarcity when comparing logistics stock to consumer spending. Population density, geographic positioning and/or higher-and-better-use development economics in these markets narrow logistics real estate uses primarily to serve local consumption, reinforced by these markets’ very small share of freight movements. Many U.S. markets are in this category including Washington D.C., Philadelphia, South Florida, Charlotte, Portland, and Central Texas.
High-growth regional hubs such as Atlanta, Dallas, Phoenix, Houston and Nashville average 100 to 150 square feet per householdⁱreflecting both sizeable and increasing local consumption and a growing regional distribution role. As a result of this consumption orientation, demand in this category will likely be resilient in a range of trade policy scenarios.
Regional distribution hubs are concentrated in the Midwest with approximately 130 square feet per household.ⁱ While many customers in this category choose their locations based on reaching multiple markets within a one-day truck drive, a portion of the customer base serves the flow of global trade, particularly in key intermodal hubs like Chicago.
Import-heavy markets exceed 200 square feet per householdⁱ with relatively small local populations and large logistics real estate footprints. Examples like Savannah, Memphis and Charleston are highly exposed to global trade, with up to 75%ⁱof customer operations linked to international flows. These markets face outsized risks to changing terms of trade.

High-population port markets are economic powerhouses that serve both consumption and trade flows. These markets average 50 to 80 square feet per householdⁱwith most activity focused on local consumption. At the same time, a portion of demand stems from proximity to major ports and connections to other metros. These locations are multi-purpose: many facilities support e-commerce, retail replenishment, and secondary warehouse distribution within a single footprint. In Southern California, a detailed review of customer business points to roughly 75% of customer demand serving local and regional distribution, with 25% tied to global trade.ⁱThis ties with Southern California’s Modern Logistics Concentration at 77 square feet per household. Seattle, greater New York City and the San Francisco Bay Area have even higher shares of domestic-facing demand and lower ratios of stock per household and stock over consumer spending.

How much risk do port markets face in a trade war? Without clarity on future policy and its permanence, this is a hypothetical exercise with a range of outcomes. However, with approximately 25% of Southern California customers engaged in global trade and the likely continued U.S. reliance on partners for low-cost, low-margin manufacturing, we can begin to bracket likely scenarios. Past tariff policies reshuffled trade; a decline in China’s market share of U.S. imports and rise in China-plus-one Asia-based strategies continued to grow transpacific trade. Although unlikely, a wider swath of manufacturing being onshored or nearshored (to Mexico)—including lower value-add product—would limit future expansion of import-oriented customers while preserving both export-oriented and consumption-oriented demand.

III) Origins of Goods Movement

Logistics real estate customers can be categorized into four primary sourcing groups:.

Notable domestic sourcing: Roughly 40% of goods flowing through logistics facilities are domestically sourced.ⁱⁱ High domestic content is typical in food, beverage, consumer packaged goods, and paper and packaging sectors. Other segments with meaningful (but not majority) domestic content include hardware and parts of the auto supply chain, such as tires.
Declining China dependence post-tariffs: About 20% of goods originate in China,ⁱⁱ concentrated in sectors like furniture, appliances, clothing, and other lower value-added manufacturing (for example, toys).
Rising Asia ex-China exposure post-tariffs: Dependence on non-China Asia is higher, at 20% to 25%.ⁱⁱ Supply chains are diversifying toward countries like Vietnam and South Korea that are key sources for clothing, home goods and auto parts.
Mexico: Mexico accounts for 10% or more of U.S. goodsⁱⁱ, and near-shoring investments are boosting its share. Import volumes are significant in autos and electronics. However, warehouse exposure is much less, as U.S. logistics facilities do not handle finished vehicles.
Room for surprises: Tracing Tier 1 suppliers highlights immediate risks, but second-tier exposures can reveal broader vulnerabilities. As seen during COVID pandemic, global interdependencies can amplify disruptions as goods cross multiple borders.

IV) Customer Feedback

The best way to assess impact on logistics real estate is a direct dialogue with customers. Prologis maintains ongoing, in-depth dialogue with customers to understand their businesses and evolving real estate needs. In recent weeks, these conversations have intensified as all parties in the supply chain seek to understand the impact of rising trade tensions and macro uncertainty on the global economy. We supplemented with perspectives on supply chain responses from our IBI survey. These key themes are grounded in direct customer feedback, sales team insights and perspectives from supply chain leaders across sectors:

Varying import dependence underscores different responses. Roughly half of customers report that most or all their products are sourced domestically and have seen minimal tariff impact. About a third have moderate exposure and are adjusting pricing and supplier terms but expect to manage through. The remaining 5% to 10%ⁱ—highly reliant on imports, particularly from China—are responding with price hikes, inventory shifts and active supply chain reevaluation.
Sector and scale shape response strategies. Food, beverage and many consumer products face little change, given limited exposure. In contrast, furniture, fashion and low value-added manufactured products face potential supply chain disruptions. Larger companies report they are equipped to absorb shocks, with diversified sourcing, financial resources, and specialized teams to navigate volatility.
Supply chains are showing visible strain after April 2, 2025. Container volumes are decliningⁱⁱⁱ, customs congestion is risingⁱⁱ, and some outbound shipments have paused. Many customers have built inventory buffers through mid-2025 but are bracing for reduced flexibility in the second half of the year.
Agility and resilience are top priorities. Customers have applied lessons learned from the COVID pandemic to today’s trade volatility. They are now seeking overflow space and flexible 3PL support and exploring FTZs and bonded warehouse options.
Tariff and macro uncertainty is delaying decisions. Lease renewals, expansions and sourcing shifts are being postponed. This is due less to tariff costs and more due to unpredictability around policy duration, economic risks and planning horizons. With supply chain efficiency work in the rearview, customers report a focus on growth initiatives, with plans in place to advance once clarity emerges.
Structural shifts will come later. While interest in nearshoring and onshoring grows, most customers view these as two-to-five-year transitions. Few are moving decisively today given potential future policy changes.

Conclusion

While global trade remains integral to the logistics ecosystem, U.S. logistics real estate demand is fundamentally anchored in domestic consumption. This foundation provides enduring stability amid shifting trade flows and evolving policy.

Understanding exposure to trade enables more informed assessments of risk and opportunity. Not all locations are equally vulnerable to trade volatility: assets serving end-consumption are more insulated, while those tied to trade flows are more exposed to disruption. That said, prolonged uncertainty delays important long-term investment decisions, underscoring the need for policy clarity for business leaders to plan around a clear vision of the future.

As trade dynamics continue to evolve, distinguishing between structural and cyclical changes will be essential. Prologis will continue to deliver insights grounded in customer behavior, global data, and local market intelligence to support confident, forward-looking decision-making.