Haulage and warehousing – what to expect in the first quarter of 2018

Demands for warehouse space in the UK

Pressure on haulage & warehousing in the new year is likely to be substantial, and one reason for the upswing in interest in warehousing in the UK is the difficult situation that the motor trade is experiencing. Sales of new cars in the UK declined precipitously in 2017, falling 5.7% which is the biggest slump since 2009.  Sales in December alone plunged 14.4% on the previous year. Warehousing is likely to experience a knock-on effect, with at least one Japanese car manufacturer already outlining contingency plans to take on extra warehouse space to stockpile parts for vehicles that aren’t required due to a shrinking marketplace.

 

Haulier crime

The Transported Asset Protection Association (TAPA) has recently reported that 85.1% of all cargo theft reported in November took place in unsecured locations. The report covers Europe, the Middle East and Africa (EMEA) and it’s a reinforcement of a recent claim that the Metropolitan Police may be deliberately not following up ‘lower level, higher volume crimes’ which include vandalism, vehicle crime and fuel theft. Hauliers are already concerned about the fact that they are increasingly in line for a wide range of criminal activity from pilferage, to fuel theft to being targeted by immigrants. More than 1.5 million euros of goods were stolen from parked vehicles in the UK in 2017. Worries about the security of lorry parks will continue to trouble hauliers, especially as the TAPA report showed that the UK and Germany together accounted for 89.1% of crime with 93.9% of crime in the UK happening inside unsecured parking. Warehousing with secured parking will continue to be at a premium in early 2018, with the demand intensifying in the middle of the year when longer evenings and better weather make it natural for people to be out and about, giving organised gangs the perfect excuse to scout lorry parking and locate targets.

 

Warehousing worldwide under pressure

From the Czech Republic to the Philippines, warehousing is big news, and big business. A recent report from the Czech Republic claims that the country’s central European location has led to a huge upswing in demand for warehousing. In central Manila warehousing space has outgrown capacity, currently operating at around 98% of occupancy. Like many countries that operate as logistics hubs, the Czech Republic and Manila are experiencing a range of pressures relating to entrepôt activity. The UK is also subject to these pressures and warehouse capacity is increasingly being reserved for speculative purposes which drives up costs and can leave smaller organisations needing warehouse space out in the cold. 3PL organisations are able to help smaller businesses locate cost-effective space in high demand areas such as the Heathrow area and port locations.

 

Major Road Network consultations

The latest government consultation suggests that around 5,000 of A road could be available for funding that would upgrade and improve their capacity. Schemes could include building bypass systems, linking existing motorway routes, road widening and safety enhancement. Each bid must fulfil at least one of three requirements:

1. cutting congestion
2. unlocking housing
3. boosting economic growth.

 

While development will not begin in 2018, local governments will be committing to the bid process early in the year because at the same time Highways England will be running an improvement scheme for motorways and large A roads. UK freight associations have called for this investment to focus specifically on the needs of freight logistics. In particular, they insist that improved roads should be available to every form of road transport rather than imposing HGV restrictions even around town centres and residential areas.

 

Automated warehousing

boohoo.com has become a retail success story across the UK and Europe and has made the all important and rare leap to win a teenage market in the USA. In the first quarter of 2018 it is expected to open its first automated warehouse – this new warehousing will provide more than £2 billion sales capacity but the staffing levels will barely reach double figures as engineers will each be responsible for operating a large number of robots. Automated warehousing is still largely an industry specific development, with little crossover into mainstream warehousing because the most expensive part of the process is in creating the programmes for the robots that operate the warehouses and the more specialised the tasks required, the less the input costs for creating viable robot activity. boohoo’s new system will be watched with care, and other retailers are reported to be in discussion about cooperative robotic warehouses where several companies may collaborate to share automated warehouse space although they will be in competition for the same customer pool.

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