U.S. Warehouse Vacancies Surge as Import Volumes Stabilize

U.S. warehouse vacancy rates rose to their highest levels since 2014 in Q2 2025, driven by reduced leasing activity, overcapacity, and ongoing trade policy uncertainty. Simultaneously, U.S. containerized imports rebounded modestly in June, offering some relief after May’s sharp drop—but challenges persist, especially for logistics firms navigating shifting supply chains, port dynamics, and global risks.

Warehousing Market Rebalances After Pandemic Overbuild

According to Cushman & Wakefield, the U.S. warehouse vacancy rate climbed to 7.1% in Q2 2025, up from 6.1% a year earlier. This marks the highest rate since 2014, following three years of expansion fueled by pandemic-driven inventory surges. Businesses are now unwinding surplus space, with over 225 million square feet listed for sublease, a 25% increase year-over-year.

“The market has been moving in fits and starts,” said Jason Tolliver, head of logistics at Cushman. “Retailers frontloaded goods earlier this year but have since paused leasing amid tariff uncertainty.”

Developers are also pulling back, with new construction completions down 45% from Q2 2024. Yet industrial rents continue to rise, reaching $10.12 per square foot nationally, driven by long-term leasing behavior and regional imbalances in supply and demand.

Imports Stabilize in June, But China Volumes Remain Weak

June 2025 U.S. container imports reached 2.22 million TEUs, up 1.8% from May but still 3.5% below June 2024 levels. The modest rebound follows a sharp drop in May caused by frontloading and tariff-driven uncertainty.

While importers adapted supply chains to absorb trade shocks, China-origin volumes remain significantly suppressed, down 28.3% YoY, reflecting the lasting effects of:

• Revoked de minimis exemptions for low-value parcels
• Elevated tariffs on Chinese goods (temporarily reduced to 30% through August 10)
• A 40% tariff on re-exported goods from Vietnam aimed at combatting transshipment

Importers are diversifying sourcing, with Vietnam, Indonesia, and Thailand seeing YoY growth in shipments to the U.S. Still, overall trade flows remain volatile as key tariff deadlines loom.

Port Performance: West Coast Recovers, East Coast Slips

In June, the top five West Coast ports increased their market share to 45.4%, led by strong gains in Los Angeles, Long Beach, Tacoma, and Seattle. This marks a sharp reversal from May, as Pacific-facing ports benefitted from improved congestion and early impacts of the U.S.–China tariff truce.

In contrast, East and Gulf Coast ports saw import volumes fall, with Savannah, Charleston, Houston, and Norfolk posting double-digit declines. This regional shift mirrors how businesses are rethinking freight routing strategies amid rising shipping costs and ongoing delays in the Red Sea corridor. Port transit delays improved broadly in June, with Los Angeles and Long Beach cutting average wait times by over 2 days, according to Descartes.

Implications for Freight Brokers and Carriers

The evolving logistics environment presents both risks and strategic opportunities for brokers and carriers:

• Warehouse Overcapacity means more sublease deals and pricing pressure, especially in secondary markets.
• Tariff-Driven Shifts require routing flexibility and updated sourcing strategies—China is no longer the dominant player it was pre-2024.
• West Coast Resurgence creates lane imbalances, potentially impacting pricing for drayage and intermodal.
• Carrier Selection and Port Strategy are increasingly tied to geopolitical risk, especially with persistent Red Sea disruptions and shifting U.S. trade policy.

With warehouse leasing activity and import patterns in flux, stakeholders across the supply chain must remain agile. Companies that can adjust quickly to new sourcing landscapes and optimize routing will be best positioned to navigate the second half of 2025.

Source: WSJ | Descartes