There are some years people are pleased to see the back of, and 2009 is definitely one. The last 12 months have been extremely tough, in the words of Bernard Molloy, MD of Hoppecke Industrial Batteries Ltd, and Chairman of the Chartered Institute of Logistics & Transport’s Warehouse & Materials Handling forum.

Currently celebrating 40 years in the materials handling industry, Bernard says he saw the recession coming, as did many others, but at the time no one shared his foreboding about its severity:

“I was criticised by my peers two years ago because I said we were on the edge of one of the biggest recessions the world had ever seen. People didn’t believe me, but sadly I was proved right. The recession was an accident waiting to happen, given the state of the financial sub primes market and house price-driven greed.

“Since then we’ve seen a major period of readjustment, which has sorted the wheat from the chaff. Now everything is much more rational: consumers are more realistic about what they can afford, and similarly people in business are sweating their assets much more. As an instance of this new realism, people are asking themselves why they should keep their forklifts for just five years, when they can hang on to them for over seven.”

bpi.films’ Sales Director Alex Begley says thanks to a combination of strategic foresight, careful planning and good fortune, his company has remained resilient: “Our films package everything from food, beverages and household goods to heavy duty, industrial items. Whilst some sectors have been hard hit, others have continued as normal or even grown.

Overall demand has remained strong and orders are healthy as ever. In ‘W&L’ we’ve noticed steady growth in organisations employing our stretchfilms to replace traditional, heavier packaging such as crates. Raw material costs have risen in the last few months but are stabilising, and we are fairly well hedged against this winter’s energy costs.”

Mr. Steen Rasmussen, Corporate VP for Sales & Marketing at Caljan Rite-Hite, says that despite the trend for postponing large projects during the last 18 months, Caljan has grown its market share, The Euro/pound exchange rate has proved a challenge, but Caljan is committed to a strategic presence here. Steen says although there’s been a small increase in public expenditure, the W&L sector is reluctant to invest in major projects, and is implementing initiatives to reduce expenditure instead. A particular success is Caljan Rite-Hite’s Revolution™ Fan, which optimises heat circulation in warehouses, cutting energy bills up to 30%.

Third party logistics provider TM Logistics Ltd ‘s Sales Manager Andrew Lawrence says 2009 turnover is down, mainly due to some larger customers’ volumes dipping due to the building recession. TML’s new fiscal has brought over £20m of contract extensions and new business wins, and a very healthy looking order pipeline. TML have invested over £1m in new equipment, enlarging its drawbar fleet to meet customer demand and increasing its UK operating centres, with some exciting new ventures planned for 2010.

“Warehousing has seen a shift to short-term commitment, with rents fluctuating still and no one prepared to invest long-term. 2010 will be very tough,” says Andrew, “and forecasts of the recession being over are probably premature; however, in difficult times, stronger businesses can still grow, as we are demonstrating. We believe by the end of 2010 we will see an upturn in our existing customers’ volumes as conditions improve.”

Jack Kuypers, Branch Manager Northwest Europe for Witron, says:  “This year we have noticed customers in general giving decisions more of a second thought before moving ahead. People are very aware of what they are doing, and need good reasons and proof of the benefits before proceeding with investments. Most projects we carry out are strategically important to the companies concerned, and these long-term strategies haven’t changed much. With concepts proven at many customers in many branches, we have proved to be a stable factor in a volatile market that customers and financers can trust without any risk. We have had very good orders, and are looking at many interesting leads.”

Hörmann UK has been reducing unnecessary costs and expenditure since September/October 2008. Commercial Director Alan Jenkins says, “This has helped maintain our position in both the domestic and industrial markets. Our cost-saving activities mirror the reduction in our turnover in both sectors, but in some cases our market share has actually increased as many long-standing customers will not risk damaging their reputation by buying and passing on lower quality products. Secondly there have been a number of changes in both our markets, with competitors re-branding or re-focusing on other areas and in some cases going out of business.

“The biggest industrial business downturn we have faced is in the ‘Big Shed’ market, down as much as 50-60% on 2007. Most developers have gone through massive restructuring and rationalising, not helped by the Government’s refusal to remove ‘Empty Rates,’ a major reason why speculative development of new warehousing stopped dead. Some developers have gone so far as to demolish good warehousing stock to avoid this crippling tax.

“There are signs that the UK is slowly moving out of recession and a small but growing feeling of optimism, but like many I also believe 2010 will be tough. The emphasis for the Big Shed market will be on refurbishing some of the existing empty warehouse stock. Also we may see increased rental income, as most existing sheds have been let at extremely low rents. With a potential shortage of suitable new or refurbished warehousing in the future, we may see a mini boom in new builds or a return to healthier rental values.”

2009 has presented both challenges and opportunities for Storax Racking Supplies, says Ken Pawley, General Manager. “On the down side, highly aggressive pricing from the European manufacturers has produced unrealistic and unsustainable market price expectations.  By mid 2009, the ballpark price buyers were expecting to pay per pallet stored was the same as 20 years ago!  However, we have also found that people will still pay a small premium for good quality products, efficient service and quick availability.

“Ironically another positive for Storax has been the shortage of capital for new projects, prompting many facilities managers to repair and re-configure their existing warehouse kit, rather than strip out and start again. For us this has translated into good levels of orders for SP80 racking components for repairs to existing installations. Although some are over 30 years old, ‘make do and mend’ seems to have been the watchword for many users this year.  Storax have also benefited from optimisation projects, including the addition of extra beam levels and extensions to increase warehouse capacity without the expense of re-kitting or re-locating.

“Invitations to quote for new racking projects are up on last year, across all sizes of job. However, this is almost certainly another symptom of the recession, with some buyers reportedly obtaining 12 or more prices for a scheme for which they would previously only have sourced two or three. Our trade partners also report they are now competing for small jobs their customers wouldn’t previously have taken the trouble or the time to obtain comparative prices for. In addition, they tell us that the UK manufacturers’ direct sales people are now competing with them for modest-sized jobs that they would previously not have been interested in. The days when the little man could rely on the pickings from the rich man’s table seem to be a thing of the past this year.”

Storax are optimistic the economic picture will improve, but are planning their activities for next year on the basis that the UK will lag behind mainland Europe in coming out of recession: “We believe it is a great shame that the organisers of the flagship show for the industry, IMHX, have taken the decision to defer the show from March to November. As exhibitors, we are disappointed at this negativity, believing it sends out a defeatist message at a time when the opposite approach is needed.”

Finally, this magazine has often carried gloomy comments about the forklift truck industry in 2009, but Yale Europe’s MD Frank Ulbricht is definitely looking on the bright side: “We have enjoyed a period of unprecedented growth and as a global forklift truck business, we’re in the strongest possible position to serve our customers and increase our market share next year.

“We have invested in new product development, which has seen the introduction of new AC based technology across our latest warehouse trucks and order pickers, and extended our Veracitor VX Series. This year we also launched a new generation of three and four wheel electric counterbalance trucks. Add our investment in new dealers, the growing list of high profile customers like AkzoNobel, Ciba and Pirelli, who operate Yale equipment on a pan-European basis, and our commitment to customers throughout EMEA and we believe we have every reason to be optimistic.”

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