{"id":96249,"date":"2026-05-25T00:00:00","date_gmt":"2026-05-25T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/logistics\/?p=96249"},"modified":"2026-05-25T05:31:58","modified_gmt":"2026-05-25T05:31:58","slug":"what-happens-when-the-chokepoint-shifts-to-the-warehouse","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/logistics\/2026\/05\/25\/what-happens-when-the-chokepoint-shifts-to-the-warehouse\/","title":{"rendered":"What happens when the chokepoint shifts to the warehouse?"},"content":{"rendered":"

What happens when cargo has nowhere to sit? <\/strong>Since the war began, freight freight flows have become more volatile \u2014 trucks<\/a> absorbed the shock, rail<\/a> hit structural limits, and airlines<\/a> grappled with fuel constraints. But the real bottleneck may be quieter: warehousing.<\/p>\n

The conflict stalled parts of the Gulf\u2019s industrial and logistics demand pipeline amid a <\/strong>period of extreme uncertainty. <\/strong>\u201cThe war had a noticeable impact on occupier demand patterns across the region,\u201d Maxim Talmatchi, Partner, Head of Industrial and Logistic at Knight Frank UAE, tells EnterpriseAM.<\/p>\n

The first reaction was caution:<\/strong> Around one-third of active warehouse requirements were paused at the peak of uncertainty, as occupiers waited for greater clarity on how the conflict would affect operations and supply chains, Talmatchi says. Some of those requirements have since returned to the market after the April ceasefire.<\/p>\n

Air freight absorbed the initial shock<\/p>\n

Occupiers prioritized continuity over expansion.<\/strong> Occupiers focused on continuity over expansion, shifting parts of their supply chains from sea freight to air freight rather than taking on new warehouse space, as concerns over Hormuz mounted, Talmatchi says.<\/p>\n

Air freight kept goods moving, but at a significant premium. <\/strong>\u201cWhile this significantly increased logistics costs \u2014 which are ultimately expected to be passed on to consumers \u2014 it also allowed many businesses to maintain operational continuity without materially increasing their warehouse footprint or inventory holdings,\u201d Talmatchi argues.<\/p>\n

The cost impact is now filtering into carrier pricing:<\/strong> Maersk\u2019s latest updates<\/a> signal higher fuel volatility, rising fuel surcharges, and the introduction of transit disruption surcharges to reflect tighter capacity and rerouting pressures.<\/p>\n

Rents didn\u2019t move in one direction<\/p>\n

The war dampened sentiment in some locations rather than driving rents uniformly <\/strong>higher.<\/strong> \u201cWe are still assessing the full rental impact by location and asset type; however, it is evident that the disruption has introduced a softer market sentiment across parts of the industrial and logistics sector,\u201d Talmatchi argues. \u201cAt this stage, rental softening appears to be more pronounced in areas that experienced the strongest rental growth over the past cycle,\u201d he adds.<\/p>\n

That adjustment follows a period of pronounced rental inflation across core industrial <\/strong>hubs. <\/strong>Al Quoz remained the UAE\u2019s most expensive<\/a> industrial location, with Grade A rents reaching AED 85 per sq ft in 2Q 2025, up 31% y-o-y, while Dubai Investments Park increased 33% to AED 60 per sq ft. In Abu Dhabi, KEZAD Musaffah (ICAD) and Musaffah recorded gains of 57% and 52%. The scale of prior growth helps explain why the disruption translated into caution rather than continued rent chasing.<\/p>\n

When cargo reroutes, storage follows<\/p>\n

Fujairah is seeing rising interest as occupiers diversify logistics footprints. <\/strong>Talmatchi says Knight Frank has \u201cobserved increased occupier interest in alternative logistics locations such as Fujairah, particularly tenants seeking either land or warehousing solutions \u2014 a trend that was far less common prior to the conflict.\u201d This reflects a broader operational reconfiguration, with Fujairah and Khor Fakkan increasingly acting as secondary gateways<\/a> as cargo flows are rerouted across multimodal networks.<\/p>\n

At the same time, the UAE\u2019s industrial geography is broadening.<\/strong> Dubai and Abu Dhabi continue to anchor the market, but supply constraints are pushing demand outward. Knight Frank\u2019s 1H 2025 data<\/a> shows just 780k sq ft of speculative industrial space expected in Dubai this year, while Northern Emirates rents rose 40% year-on-year as occupiers expanded into alternatives including Umm Al Quwain.<\/p>\n

The essentials test<\/p>\n

Essential goods drive the clearest storage pressure.<\/strong> \u201cThe strongest demand for additional storage capacity came from food-related industries,\u201d Talmatchi says. Logistics operators focused heavily on continuity for critical commodities during the conflict. AD Ports said<\/a> its redeployment strategy prioritized the movement of food, medicines, strategic reserves, and other essential inputs, supported by warehousing and storage capacity.<\/p>\n

\u201cThe conflict didn\u2019t create empty shelves in the UAE, but it did show why essential-goods <\/strong>storage matters,\u201d <\/strong>Talmatchi tells us. \u201cDespite the challenges, there were no meaningful disruptions to the supply of essential goods, and consumers did not experience shortages or empty supermarket shelves,\u201d he argues. \u201cMost occupiers were able to maintain business continuity without requiring major changes to their operational footprint \u2014 highlighting the maturity and competitiveness of the UAE logistics market,\u201d Talmatchi adds.<\/p>\n

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Despite the challenges, there were no meaningful disruptions to the supply of essential goods, and consumers did not experience shortages or empty supermarket 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