The warehousing sector at the heart of the logistics business is showing clear signs of contraction, says The Wall Street Journal. Employment at warehouse and storage businesses fell in March to the lowest level in fifteen months, with companies slashing payrolls by 11,800 jobs.

Operations that were scrambling to find workers in early 2022 have now cut nearly 50,000 jobs since June, according to new government figures. The pullback is commensurate with slowing demand for freight shipping, as retailers pare inventories rather than add to existing stocks.

Low vacancy rates suggest space is still tight by historical standards even as construction and leasing rates level off from pandemic-era highs. 

The impact of underlying demand takes time to show up in warehousing, however, because of industrial real estate’s long lead times for planning and multiyear leases. The dwindling hiring levels suggest that work inside the distribution centers is already slowing down.