Sunday 11th Dec 2016 - Logistics Manager

What’s the plan?

The dramatic decline in available warehousing in the UK is only too obvious to anyone looking for suitable space in recent months. But the issue is brought sharply into focus by the Christmas rush.

Malory Davies FCILT, Editor.

Malory Davies FCILT,
Editor.

The massive peak in retail sales at Christmas demands that retailers and logistics operators have temporary space available at the critical time. As warehouse supply has declined, forward-thinking organisations have been lining up their requirements earlier and earlier.

This year, Royal Mail started planning its temporary parcels centres in February. And it is now being seriously suggested that for some the only option might be to take a standard lease and just leave the building empty for the eight months of the year that it is not needed. This can hardly help the cost to serve.

It’s worth pointing out here that the growth in online deliveries has not abated. Latest figures from the IMRG MetaPack survey show that in April, online deliveries were 11 per cent up on a year ago – for the full year that would mean 992 million orders dispatched by UK e-retailers through UK carriers.

And some believe that the figure could top one billion.

Andrew Starkey, head of e-logistics at IMRG, says: “Although the current growth rate is below our 13 per cent full year forecast we would not be surprised to see post-election consumer confidence push this up over the coming months. The month of May tends to show a slight increase in order volumes followed by a drop in June and a mini peak in July. It will be interesting to see if this trend is followed but if exceeded it may herald a surge in consumer demand.”

The danger of course is that there will be a lack of suitable infrastructure when the need is most critical.

Last year’s Black Friday problems have prompted some carriers to suggest that there should a different service regime at peak periods, so that the standard level of service would become two to three day delivery rather than overnight.

But even maintaining that level of service could prove problematic for some, if they cannot get the temporary space they need. It has never been more important to plan ahead.