Prologis CEO Dan Letter says warehouse demand is shifting toward decentralized fulfillment networks closer to consumers, driven by rising delivery speed expectations and energy reliability needs.
A Prologis survey of more than 1,800 business leaders across the U.S., U.K., Germany, India, China and Mexico found that 91% said retailers and logistics providers urgently need more decentralized networks. The share of companies planning to keep their existing global footprint fell 14 percentage points year-over-year to 36%.
Same-day delivery has become a priority. The share of companies offering it doubled since 2019. Speed now ranks above price as a competitive advantage, according to the survey.
Companies are reshaping their strategies. More than half are both diversifying and regionalizing, while about a third are nearshoring and reshoring.
Letter said Prologis has sold over 200 million square feet in the past 15 years from its 1.3 billion square foot portfolio because properties did not align with customer long-term vision.
Power reliability now ranks number one in logistics location decisions. Just over a quarter of executives expect industrial landlords and developers to lead or fund on-site energy resilience infrastructure including solar, energy storage and fleet charging.
Prologis has generated over 1.4 gigawatts of power from its solar and storage business after focusing on the energy side five years ago. The company is also helping customers electrify their fleets.
Three-quarters of executives surveyed plan large AI investments in demand forecasting and inventory replenishment. Letter said Prologis is making investments alongside customers to understand AI development and stay ahead.