The warehousing and logistics sector is changing, but that’s because the nature of business and commerce are changing. The two have always been connected. In ancient times, storage was a symbol of state power, a mechanism to control populations by avoiding social turmoil, and looking at recent politics you could argue that that’s still true. Think of the government’s appointment of Sir Dave Lewis this time last year to ‘save Christmas’ in the face of supply chain volatility and the threat of shortages on the shelves leading to civil unrest.
Similarly, the steamship has been described as a major driver of the first wave of trade globalisation, and port architecture from the mid-1800s reflects the rise of warehousing, from London’s docklands to Glasgow and Liverpool.
Over the last century, we saw the emergence of The Golden Triangle with the rise of road freight after denationalisation. Today, GLP’s 550-acre logistics park, with over 8m sq ft of warehouse space at Lutterworth and Prologis’s DIRFT (Daventry International Rail Freight Terminal), just 10 miles further south, are two of the biggest warehousing developments in the UK: between them they probably have 100 warehouses and all are ‘big sheds’ of over 100,000 sq ft. American e-commerce companies like Amazon and Wayfair are among the occupiers at Magna Park, but Asda are still there too, along with Lidl. Bricks-and-mortar retailers still need warehouses too.
As traditional High Street trade retracts and online shopping grows, retailing activities are moving back up the supply chain into warehouses, which have proliferated and become larger. There is more demand than ever for space and labour – processes have become more complex and are increasingly digitalised.
Returns management has become a specialist area for 3PLs and an even bigger role for the warehouse is in prospect with the arrival of the circular economy, requiring upcycling, repairs and postponement of personalisation, reducing waste.
In their latest survey, Colliers showed that land values have continued to increase in the UK, along with rental prices. Large distribution warehouses are up nearly 15 percent at an average of £10 per sq ft and smaller units are proportionately even more expensive and increasing even faster. This is due to the continued imbalance between supply and demand, caused in part by our broken planning system. So, whilst land values are stabilising and may even fall, warehouse rents continue to rise.
Warehousing is growing and has more than ever to offer, both in terms of customer service and exciting career opportunities for young people.
Our sector has always been connected to commerce, and as e-commerce dominates, warehousing is stepping up into its well-deserved place at the heart of the economy.
Clare Bottle
UKWA, CEO
Comments are closed.