The health of the warehousing and logistics sector is a strong indicator of the health of the UK economy as a whole, and it’s high time the government recognised this. Ours is one of the UK’s most rapidly growing sectors and contributes an estimated £163m GVA to the economy, yet too often we are overlooked in the corridors of power.
There are more warehouses today than ever before, with an estimated 750m sq. ft over 100,000 sq. ft in the UK. Growth is set to continue as ecommerce has forced High Street tasks such as picking back up the supply chain, while quasi-manufacturing activities like assembling gift-packs or printing T-shirts are pushed downstream into the warehouse too. But there are many challenges ahead.
For one thing, according to Savills, only a quarter of all warehousing stock has been built since 2010. This suggests that up to three quarters of warehouses are likely to be out of date, with low EPCs and high running costs. This issue will be coming into sharp focus with the introduction of new regulations that state warehouses MUST reach an EPC rating of ‘C’ or above from 2025. Significant capital investment will be required to bring this stock up to scratch.
UKWA has established that solar power on warehouse rooftops has the potential to generate sufficient electricity to double UK solar capacity, as well as saving billions of pounds and reducing carbon emissions by several million tonnes. However, connection to the National Grid is proving a major barrier to progress, with developers and warehouse operators alike reporting that connection will not be achievable until the 2030s. Clearly, this is a serious problem and one that the government needs to address as a matter of urgency.
Location and planning is yet another thorn in our side. Warehouses need to be closer to centres of population, for employment reasons as well as to fulfil customer delivery expectations, yet we know that local authorities resist industrial development in residential communities. Currently, planning consultations can take years and cost a fortune, often with no positive conclusion. Residential development is crucial of course, but if the government’s plans for 300,000 new homes comes to fruition, they must take account of the fact that these homes also represent 300,000 new delivery addresses – so, similarly to doctors’ surgeries and schools, warehousing must be baked into new residential development schemes. The government recently issued a Call for Evidence on Freight, Logistics and the Planning System; UKWA responded accordingly and we await the next steps.
Markets may ebb and flow, but these issues are not going away. Our mission at UKWA is to provide a powerful voice for warehousing, not only telling government what we do and how well we do it, but to speak clearly on what we want for warehousing.