Over the last couple of weeks, we’ve witnessed extraordinary scenes as shopping malls and high streets open again after twelve weeks in lockdown. Despite the desperate state of the economy and dire warnings of job losses, euphoric shoppers have been excitedly queueing to spend, spend, spend, with scant regard for social distancing, while relieved retailers count the blessings of pent-up demand.
Behind the positive pictures though, what lies ahead? For the warehousing sector, while many operators have been busy providing ‘essential’ supply chain services, others have seen income decimated due to ‘non-essential’ manufacturers and retailers effectively going into hibernation for three months. Although the opening of shops and factories have eased the pressure on space as outbound flows resume, for many coming back into full operation cash flow will determine whether or not they survive.
Quarterly rent was payable in June, with next payment due in September, by which time the government will have reduced financial support for employers furloughing workers, adding to the squeeze. Accordingly, UKWA is continuing to lobby government for a six-month holiday on business rates to mitigate the immediate impact on members and the wider logistics community.
We are pleased to hear that the government has announced the reduction of the two-metre distancing rule to one metre plus, which will enable businesses in our industry to get back to ‘normal’. However, even with the new social distancing requirements, many will be unable to bring back their full workforce.
With current social distancing requirements, many will be unable to bring back their full workforce. Fewer workers will in turn mean lower productivity and longer lead times, so that customers must be patient, pay their bills on time and support the supply chain that supports them.
On the positive side, finally the government has recognised that going forward multifunctional inland sites will be required for customs and SPS procedures, as the UK ports are simply not geared up to manage the estimated 200 million extra customs declarations and related inspections post-Brexit and have no room for expansion.
This has been a key message from UKWA for some time, we have repeatedly recommended utilising existing inland warehouse facilities as inspection depots. Plenty of our members operate customs bonded warehouses and temperature-controlled facilities within reach of the major ro/ro ports and have the experience, skills and labour to provide necessary inspection services. This is an opportunity for warehouse operators to extend their service offering and for the government to achieve a cost-effective, turnkey solution in the face of enormous challenges ahead.
In the meantime, we hope that this strategy is suitably aligned with the Freeports consultation, to which UKWA will add the voice of our industry, delivering much needed joined up thinking on post-Brexit planning.