After an extraordinary year, Tony Mannix sits down with Nick Bradley to discuss how leaders like him can help guide us through these choppy waters
Despite the massive ramifications of the pandemic, a pragmatic Tony Mannix believes that – all things considered – Clipper Logistics coped reasonably well and eventually ended up having a “good year”. Of course it wasn’t without a huge number of once-in-a-generation challenges, seemingly arriving on a daily basis at the start of Covid-19.
Straight off the bat, Mannix, the company’s Group CEO, reacted to the March 2020 lockdown by first and foremost ensuring his staff were protected with all the “appropriate protocols and social distancing” in place. Immediately after, he and his team reached out to the entire Clipper customer base, many of which were suffering due to the enforced restrictions that literally turned their businesses upside-down overnight.
“We were ringing around and just saying, ‘Look, how can we help?’”, Mannix recalls. Largely, this involved developing strategies for survival, reacting to events on an hour-by-hour basis in some cases. “As well as helping existing clients, we also ended up working in sectors we previously hadn’t operated in, such as grocery distribution. Essentially we were supporting customers in any way that we could.”
For a logistics provider to move into an entirely new market would normally involve months of planning, but there was no time for that. Clipper’s top man attributes this fast and successful transition to groceries, among other markets, to it being a “retail solutions business”, as opposed to a regular 3PL.
It was stressful and exciting, but Mannix is proud of what was achieved, particularly how his team members and the wider logistics community rallied. Clipper, as an example, was enlisted to help the NHS in the provision of PPE and other supplies. Four days after receiving that call, he and his team had a fully operational IT system in place. “A few weeks later, we were asked to help various GP surgeries,” Mannix reports. “Some of the things we achieved during that crazy period would have taken weeks or months of planning in normal times but we had to get things done in just days.”
Rising to the challenge?
Further reflecting on how events unfolded in 2020, Mannix recounts how some of Clipper’s existing retail clients – those not selling ‘essential’ items – had to shut up their physical stores yet cater to the new, dramatic and immediate shift in online orders. It was a switch that required quick and effective decision-making, with no time to lose and no time for mistakes, so the majority of Clipper’s warehousing capacity for bricks-and-mortar stores transitioned to online fulfilment. “The fact that the High Street slowed so much during the lockdown meant we were able to move resources around within Clipper to cater for what High Street remained and the increased online orders.”
Another aspect of the business that Clipper Logistics is focusing on is that of modular robotics and modular automation. Mannix says he can source solutions for companies of different sizes dependent on needs and capabilities. “We have been involved in projects where the of use robots for returns was necessary,” he reveals. Automation is a big part of operations at Clipper also and auto-bagging machines that can handle several different processes that would normally be handled manually have been introduced. This, he says, helps retailers save money while also speeding-up the process. “We are always looking to automate for efficiency where necessary, but not to remove employees. That’s important. It’s always been about making tasks easier by cutting out heavy or repetitive manual labour.”
With many people being advised to work from home – not just in the UK but globally – the upward trend seen in e-commerce orders wasn’t a surprise. What was surprising was the shift in demand for the different types of products that people put in their shopping carts, and this also brought about some specific challenges.
There was a huge demand for home improvement and loungewear products, and manufacturers had to adapt to this also. “John Lewis started selling a lot of food mixers and bread makers, and other household appliances, because people had more time to do things domestically,” Mannix says. “And a
lot of the fashion manufacturers switched their capacity to loungewear, as the demand for office and evening wear dropped off a cliff.”
Sales of bikes and exercise gear boomed. Outdoor and indoor games, home and garden items, books and electrical goods all experienced huge surges, which created waves all along these individual supply chains. “The lockdown stretched a lot of capabilities and it wasn’t just in fulfilment – manufacturing was challenged, too,” Mannix notes.
People who ordinarily wouldn’t have bought online did and Mannix suspects that some will probably continue to do so, though not all. The proportion of retail sales conducted online remains substantially higher than before the pandemic, but in June 2021 most retail sectors reported a fall in their proportions of online sales as consumers returned to shops. The total proportion of sales online decreased to 26.7% in June 2021, down from 28.4% in May 2021. Retailers will need to be prepared for and stay on top of these evolving consumer trends.
The High Street retailing landscape is clearly changing drastically, with store closures dealing many retail and leisure store categories severe blows. Yet Mannix thinks a lot of people have missed the more social aspect of buying goods in-person, and perhaps that is reflected in the latest ONS statistics.
Ultimately, though, Mannix believes online could eventually help the High Street if retailers pursue a hybrid store model – shop front with fulfilment at the rear; Argos on steroids so to speak. Micro-fulfilment is a big trend and the availability of retail space could meet that need. Who knows, Amazon could soon be coming to the High Street as well as your device?
In reality, though, e-commerce was already on the up even before Covid-19, while manufacturing lines were also beginning to feel the pinch. The pandemic only served to exacerbate this, while the fallout from Brexit just added to the complexity.
Reverse logistics is a very big part of the Clipper business, with the company processing +125 million returns so far this year already. Many of the returns, says Tony Mannix, are often same day. He says that Clipper is capable of processing the release of inventory, crediting the customer through the retailer’s systems, and taking the inventory back into the fulfilment centre, ready to be shipped out to the next customer. Clipper is also capable of repairing goods such as electrical products, in doing so maximising the value of items. “The fact that our returns-management capability sits on the back of our click-and-collect capability means that the two services can seamlessly support the speed at which things change.”
However, the uncertainties that Brexit and the pandemic have brought do not just end at finding out when things will level out – if they level out – but how they will level out. “I think the challenge coming out of this period is where does the bar go back to, as retail really starts to come back on stream again?”
Don’t stop pursuing sustainability
Bouncing back – but doing so sustainably – has also been a big topic of discussion throughout the pandemic. Logistics is traditionally responsible for a large amount of carbon pollution, with long-haul truck journeys, air freight and the manufacturing that goes into creating products and everything in the supply chain to keep goods moving. For Mannix, though, the only way to tackle the issue is head on to try to mitigate the risks. “The obvious thing, from a sustainability perspective, is that businesses like ours, retailers and distribution service providers start to think about the types of buildings to occupy and the renewable solutions within them,” he says. Alongside warehousing facilities, Mannix reveals that Clipper is already looking at battery electric and hydrogen vehicles as well as route optimisation using AI to manage its existing fleets.
“My gut feeling is that the pandemic has made a lot of people reevaluate various things,” he continues. A lot of businesses have been “stretched out of shape” in more ways than coping with changing consumer spending behaviours.
Something Mannix is especially concerned about is the exodus of EU workers before, during and after the pandemic. This goes far beyond the much-publicised HGV driver crisis, but warehousing and logistics across the board. Of the 79,000 EU nationals who left the UK logistics industry in 2019, around 7,000 of them were forklift operators. And that was before the pandemic rolled into town. “Some may turn to automation to increase efficiencies but it may also mean better rewards to retain these vital workers, better training strategies and fostering talent that we already have in this country via apprenticeships or internships. A lot of skill has unfortunately left our shores, therefore companies are going to have to rethink that. You have to create a company that people want to work for and are proud to represent. I hope we have achieved that here at Clipper.”