Peter Ward, CEO of UK Warehousing Association (UKWA), warns that warehouses in the UK are currently running at almost full capacity, with little prospect of more space becoming available in the short-term
Warehouses in the UK are currently running at almost full capacity. And, with little prospect of more storage facilities becoming available in the shortterm, the pressure on Britain’s warehousing space is growing as, once again, businesses look to stockpile goods ahead of a possible ‘no deal’ Brexit on 31st October 2019.
Of course, the companies that are looking to stockpile are not simply seeking empty sheds; they require fully serviced and kitted operational facilities. Recent reports from the commercial property sector indicate that speculative building is rising again and vacancy rates have seen a modest increase of late, but new logistics buildings will typically be taken up under long-term leases, while those looking for space to stockpile are seeking short-term capacity supported by a full suite of logistics services.
What is needed right now is fitfor- purpose facilities complete with racking, forklifts, warehouse management technology – and, of course, people – all ready to go on a ‘pay-as-you-play’ basis. However, such operational and fully kitted and serviced space is in desperately short supply.
A recent survey of UKWA members revealed that 85 per cent of respondents had received Brexit-related enquiries – the majority of which were from companies with short term requirements, while 75 per cent of Association members reported that they had filled incremental space, and were now, in effect, ‘full’.
UKWA will carry out a further survey in the coming weeks, but the new survey is unlikely to show that any significant additional space has become available – if anything, the position is likely to have worsened.
October is a peak period for our industry so, with the prospect of a ‘day one no deal’ looming, the delayed date for withdrawal from the EU couldn’t come at a worse time.
Warehouses are already filling up for the traditional peak period. They’re ramping up for the Christmas season, which, of course, now includes Black Friday and Cyber Monday. Even without the impact of Brexit, this period in the year has always been challenging, not just in terms of available warehousing space, but also when it comes to the recruitment and retention of the additional labour required within warehouse and distribution centre facilities to process the upturn in order throughput – a situation which has been exacerbated further by the so-called ‘Brexodus’ of European workers following the referendum.
The warehousing shortage is not a new problem. It has been driven by several factors, not the least of which is the rapid growth of ecommerce over recent years and the changing shopping habits of today’s technology-enabled consumer.
The sustained growth of online shopping means additional warehousing is needed, strategically located close to population centres to meet the consumer’s expectation of same or next-day delivery. At the same time, in-town convenience stores require regular deliveries to ensure shelves remain fully stocked.
Essentially, we’ve witnessed a consumer revolution that has put new demands on the logistics industry, but the necessary infrastructure to support these changes simply isn’t there at the moment.
So, although Brexit is not the root cause of the problem, it has nonetheless brought the dearth of warehousing into sharp focus and any rush to stockpile goods in the supply chain is simply going to make things worse.
PETER WARD
UKWA, CEO
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