US warehousing expanding faster at key inland hubs

Industrial vacancy rates remain high across the US, but warehouses are filling up in certain markets. Space is getting tighter at industrial sites in key inland logistics hubs such as Chicago, Indianapolis and the Ohio Valley and extending to Texas and Phoenix.

US shippers are diversifying their mix of inland hubs to better connect with end-customers, said Erin Brenner, US head of first-mile and depot for A.P. Moller-Maersk.

“Inland hubs are becoming strategic nodes for customers,” Brenner told the Journal of Commerce.

She highlighted Memphis, Tennessee; Dallas; Kansas City, Missouri; and Chicago. “Specifically in the US, it’s those four,” she said. Those cities have long been leading inland transit points for international freight, but they are becoming even more important to shippers.

“It’s about where shippers need additional levers to pull,” Brenner said. Since the COVID-19 pandemic, supply chain disruption has become continual, not cyclical, she said. “It’s about having the additional levers based on the disruption we see now.”

Across the US, industrial vacancy rates average 7.4%, according to a report on the US industrial real estate market released by Colliers this month. In the 25 largest US industrial markets, the average vacancy rate is a slightly lower 7.2%.

Industrial real estate developer Prologis put the US average vacancy rate at 7.5%, which it described as “a rather low level” during a presentation to investors June 2.

“That presents recovery opportunity, but demand is still not up to a normal level,” said Christopher N. Caton, managing director of global strategy and analytics for Prologis.

Colliers’ report found that vacancy rates in 2026 to date rose 11 basis points year over year in the 25 largest industrial real estate markets while climbing 37 basis points nationwide, a signal of nascent demand in larger markets.

In Chicago, the vacancy rate is 4.9%, according to Colliers. In Cincinnati and Columbus, Ohio, the rates are 4.6% and 5.2%, respectively. Kansas City’s rate is 5.3% and Nashville’s is 5.7%.

“We’re seeing Chicago really grow,” said Brenner. “Our container depots are pretty full [moving goods] out of Chicago.” Those depots play a major role in getting empty containers back to Asia via West Coast ports, she said.

Phoenix had the highest vacancy rate of the 25 largest markets, at 10.6%, according to Colliers, a sign that there is plenty of room for growth in what has been a fast-growing market.

“We’re seeing increased [volumes] into Phoenix from Southern California, with connectivity to Houston and North Texas,” said Brenner. “We’re also seeing increased rail volume to Cleveland, the Ohio Valley and Nashville.”

Frontloading and data centers

Those increased volumes follow a surge in US imports from Asia in May and higher US manufacturing activity. US imports from Asia last month jumped 13% from April, to 1.68 million TEUs, according to PIERS, a sister company of the Journal of Commerce within S&P Global.

Domestically, shipment volumes are still declining but at a slower rate, according to the Cass Freight Index. In annualized terms, the index’s shipments component dropped 1.2% in May after falling 4.4% in April. Sequentially, the index rose 3% in May from April.

New demand may be temporary, the product of freight frontloading by international and domestic shippers ahead of higher costs or fears of disruption. But for those unloading containers at ports, driving trucks or stocking goods in warehouses, it feels real.

Data center construction is another factor driving demand for warehousing and industrial space. About 10% of Prologis’ new leasing demand in the first quarter came from data center suppliers.

“Around the US, Southeast markets have been the strongest,” Prologis CFO Timothy D. Arndt said during the June 2 investors’ presentation. “Our more interior central markets have also been surprisingly strong and well-poised to lead market rent growth out of this inflection.”

Warehouses are well prepared to handle an early wave of US imports, Prologis CEO Daniel Letter said during a Port of Los Angeles briefing on Tuesday. “They’re ready for those surges” after dealing with several years of disruption sparked by the COVID-19 pandemic, he said.

Meanwhile, the US warehouse rate index from warehousing platform WarehouseQuote was 111.8 in May, unchanged from April and the lowest since April 2025. The index is a measure of warehouse rental rates nationally.

Warehouse growth linked to supply chain diversification

Occupier demand exceeded new supply of industrial space in 11 of the 25 largest industrial markets over the past year, Colliers said, helping tighten market conditions.

Indianapolis led those markets with 15.7 million square feet of net absorption but only 3.9 million square feet of new supply. Colliers also saw demand significantly outpace deliveries of new industrial facilities in Columbus, Phoenix and Memphis.

Indiana’s capital had the highest growth in demand and the biggest decrease in its vacancy rate, according to the Colliers report. Asking rents for industrial space in Indianapolis have climbed more than 50% over the past five years, according to Colliers.

Maersk’s Brenner attributes some of the warehousing growth in inland hubs to continuing diversification of shipper supply chains. Since the pandemic, “we’ve seen more customers move away from [Los Angeles-Long Beach] to alternative gateways,” she said.

That changes the routes they choose to move freight inland. “They need multimodal options,” particularly access to intermodal rail, said Brenner.

Tighter delivery requirements and penalties for late shipments are also spurring changes for more shippers.

This article was originally published by the Journal of Commerce on June 18,2026. Executive Editor Mark Szakonyi and Senior Editor Bill Mongelluzzo contributed to this report.