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Property Play: Prologis CEO says warehouse demands are shifting fast. Here’s how he’s keeping up
Businesses are rethinking warehouse locations as they seek faster deliveries and more reliable energy supplies, while AI reshapes logistics. Prologis chief executive Dan Letter says the company is concentrating on sites near major population and consumption centres, adapting its property portfolio to what customers expect.
A Prologis and Harris Poll survey of more than 1,800 business leaders across six countries found that 91% said retailers and logistics firms urgently need more decentralised fulfilment networks. Only 36% plan to retain their current global footprint, down 14 percentage points in a year, while same-day delivery has doubled in prevalence since 2019. Prologis says it has sold more than 200 million square feet of property over 15 years and generates over 1.4 gigawatts through solar and storage; three-quarters of respondents plan major investment in AI forecasting and inventory replenishment.
In short
- Companies are moving warehouses closer to customers to speed up delivery.
- Reliable power is now a leading factor in logistics location decisions.
- Three-quarters plan major investment in AI forecasting and replenishment.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Businesses can make deliveries faster and supply chains more resilient by locating warehouses closer to customers and spreading fulfilment across more sites. As AI changes forecasting and inventory needs, adapting property portfolios and investing in reliable on-site energy may help companies meet changing expectations.
The case against
More decentralised networks can require costly new sites, infrastructure and energy investment, while reducing the efficiencies of a smaller number of large hubs. The survey captures business leaders’ stated plans, but those plans may not prove viable or necessary for every firm, especially where delivery speed and resilience do not justify the added expense.
Explained simply
Warehouses store goods before they are sent to shops or delivered to customers. A decentralised network spreads stock across more locations, often closer to large towns and cities, which can help businesses deliver quickly and respond to local demand.
Prologis is a global company that owns and operates warehouses and other logistics property; Dan Letter is its chief executive. Its customers include businesses that need space to store and move goods, and their needs can be affected by delivery times, transport links and access to dependable power.
Artificial intelligence can help businesses forecast demand and decide where to hold stock, while solar panels and energy storage can support warehouse power needs. Decisions about where to build or lease warehouses matter to businesses’ costs and delivery networks, and can shape how goods reach consumers.