Is Your Warehouse Brexit Ready?

 

There is no denying that Brexit is heavily impacting UK businesses and whether the current negotiations between the UK Government and the European Union results in a 'deal' or 'no deal' scenario, come the end of October 2019, changes are ahead for UK businesses that trade with the EU-27.

 

This think piece, which will be part of a series of features focusing on topics such as the ‘post-Brexit workforce’ and the need for 'agile warehousing in the modern age’, delves into the subject matter in full.

 

The goal of this think piece is to create a picture of the road ahead. To try and understand the issues facing warehouse and logistics operations in the years to come, and how we might be able to make the most of what we already have in order to overcome them.

 

We have sourced a wide range of facts and opinions from a number of trusted sources in order to build this think piece, and we hope, given our position in the industry, that this will be thought of as an informative and neutral document that will help you to prepare your operation for the road ahead.

 

So, the question remains: Is your warehouse Brexit ready, and furthermore: are you ready for the October 31st 2019 deadline*? Read on to find out…

Warehouse strain in a post-Brexit age

 

“Prices of warehouse space are “going through the roof”, according to Walter Boettcher, Director of Research and Forecasting at Colliers International" - via the Financial Times. [1]

 

Let’s face it, those who work within the industry have known this to be the case for a while now. What with the rising consumer demand for E-commerce and E-Tail platforms, along with the forecasted ‘death of the high street’, it was only to be expected that warehouse rents would be extorted by landlords in order to meet these demands.

 

With a lack of warehouse space comes an increased stress on storage capacity, and this will be further put to the test if the UK does not formulate a deal that allows the country - and its businesses - to operate within the Customs Union. If there is a no deal outcome, then the UK will also forfeit its right to the pre-agreed, 2-year transition period, and instead, will begin to operate under World Trade Organisation (WTO) rules.

 

If this comes to fruition, then, as Chris Giles of the Financial Times writes, “companies will need to consider alternative shipping arrangements and some will want to invest in greater warehousing, which is already reaching capacity” in order to meet the challenges that lie ahead.

 


[1] Chris Giles, Preparing for Brexit: A To-Do List for UK Companies, Financial Times (2018)

“Prices of warehouse space are “going through the roof.”

 

- Walter Boettcher,
Director of Research and Forecasting at Colliers International - 
via the Financial Times

Maximise the height of your warehouse to enhance capacity and space

Solution: Make the most of  your existing warehouse space

 

Over the last 20 years, one thing we’ve found is that most warehouse operations aren’t making the most of their existing warehouse space.

 

“Occasionally we see aisles which are too narrow for the forklift. More commonly, the aisle is too wide – which means the warehouse space is being used inefficiently,” says Storage Project Director, Gary Kirk. 

 

“A small number of long rows along the building’s length makes more efficient use of space rather than a larger number of short rows across its width,” adds Gary. When space is at a premium, you've got to make the most of what you have!

 

In order to enhance the flow of your warehouse operation, you should also “make sure that shipping and receiving areas are well separated, to prevent mix-ups. Any inefficiencies or errors there will affect the whole warehouse operation, creating a bottleneck.”

 

A few simple changes can make a world of difference to your warehouse operation, potentially saving you the unnecessary costs associated with 3rd party storage or expansion.

 

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Supply chain mapping and facilities management

 

"The ease with which vehicles and their loads can pass through Dover and the French ports will be a big test of the post-Brexit arrangement," comments James Hookham, Deputy Chief Executive at the Freight Transport Association.[2]

 

We've all heard the sound bytes mentioning the potential 'bottleneck scenario' at the Port of Dover and how we're going to need to create a number of lorry parks should the UK leave the negotiating table with a no-deal outcome. These are just rumours in the mix, but "with Ro-Ro [roll-on/roll-off] traffic growing at the current rates, getting clarification on how any future Customs procedures at Dover and elsewhere will work is the top priority for European logistics and supply chain managers in 2018," adds James.

 

Brexit talks seem to have taken an upturn recently, with Michel Barnier being quoted as saying that "a deal with the United Kingdom is 90 percent done" via CNBC. If a deal is near, then our fears of intensified customs checks may well be quelled. But, even with a deal in place, it is important to remember that businesses will still have to comply with new regulations and inspection standards in order to trade with the EU moving forward.

 

Peter Ward, CEO of the United Kingdom Warehousing Association[3] adds, “currently, inspections must be conducted within the port boundary, but post-Brexit clearly this will be impractical. Such a change would bring opportunities for UKWA members and others to adapt existing premises to accommodate inspection facilities and bring online necessary capacity more quickly”.

 

With all of the above taken into consideration, this may well be the best time to map your existing supply chain in order to identify potential weaknesses in your operation. There is no harm in having a backup plan; for any potential scenario.

 

[2] James Hookham, Annual Reports & Accounts – doverport.co.uk (2017)

[3] Peter Ward, UKWA Discusses ‘Project FACT’ on BBC News (2018)

"The ease with which vehicles and their loads can pass through Dover and the French ports will be a big test of the post-Brexit arrangement."

 

- James Hookham,
Deputy Chief Executive, Freight Transport Association

Temporary warehousing could help export operations post-Brexit

Solution: Utilise temporary warehousing and  consider  reconfiguring your setup

 

In order to meet potential inspection demands, one solution could be to erect a temporary warehouse. If you have the necessary land and space required, then you could build a 'pop up' facility to ease the burden.

 

Temporary warehousing could eliminate your dependency on costly, 3rd party storage, saving you thousands in the process whilst providing you with a new, multi-purpose facility that can store excess stock; allow you to carry out additional inspections, and be used as an additional parking hub for HGV's should the need arise.

 

In the coming years, if the customs climate changes to more of a standardised inspections procedure - similar to how it currently is - then the warehouse can be dismantled and recycled, with your additional stock relocated to your primary base of operation.  

 

Another solution could be to reconfigure your existing warehouse setup in order to incorporate new inspection zones. In some cases, it's the simple changes that yield the biggest return on investment, and with a simple space planning and product appraisal, you could identify your operational limitations in order to optimise them moving forward.

 

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Labour limitations in a  post-Brexit UK

 

A key goal of the Chequers plan, officially known as The Future Relationship Between the United Kingdom and the European Union, is to drastically reduce the current levels of immigration into the UK, which may create a number of issues for UK businesses moving forward.

 

According to the CIPD (Chartered Institute of Personnel and Development)[4], "Three-fifths of organisations also anticipate that as a result of the Brexit vote, they will in the next three years experience increased difficulty in recruiting senior and skilled/ technical employees, while two-fifths anticipate increased difficulty in recruiting operational staff."

 

The current plans are set to significantly reduce the influx of migrants into the UK, limiting the availability of high and low-skilled workers. So, post-Brexit, who exactly is going to fill these roles?

 

The warehousing industry, in particular, depends upon the low-skilled workforce to keep their operations ticking over. In light of these plans, roles may have to be redesigned to include added incentives, such as offering higher wages and flexibility in working hours to meet modern demands and to entice UK workers back into the fray.

 

One idea that has been proposed by industry is to create a labour shortage occupation list. This would, as Ashleigh Webber of Personnel Today[5] puts, give companies a "more selective approach to controlling unskilled or low-skilled migration from the EU [which] could potentially act as a catalyst for improving employer practice and enable most organisations to meet their labour and skills needs.”

 

"Three-fifths of organisations also anticipate that as a result of the Brexit vote, they will in the next three years experience increased difficulty in recruiting senior and skilled/ technical employees, while two-fifths anticipate increased difficulty in recruiting operational staff."

 

- CIPD (Chartered Institute of Personnel and Development)

Semi-automated warehouse solutions can help to ease skills shortages

Solution: Tap into semi-automated systems to ease the burden

 

One trend we've seen developing in the warehouse industry over the last few years is the rise in semi-automated solutions.

 

Now, we're not talking about the likes of Amazon or Ocado where the warehouse operation is overseen by dedicated management software which pilots drones and other robotics. Your everyday warehouse operation simply doesn't have the resource or capacity to warrant a setup such as this. What we are talking about with a lot of our clients' is more along the lines of pallet shuttles and dynamic racking systems. Systems that are engineered to enhance production flow and ease the operational burden on existing warehouse staff.

 

Another solution could be to reduce the footprint of your warehouse operatives via the construction of a multi-tier system. This, in turn, allows your warehouse operatives to work on a designated floor, reducing time lost travelling between the floors by increasing productivity at the pick face. The structure can also be partnered with a dedicated conveyor system, which can be installed on either a manual or automated basis. A solution such as this could also allow for greater transference of product through your floors, maximising productivity whilst reducing the burden on your warehouse team.

There are, of course, a number of ways to combat skills shortages, but a combination of the above suggestions could help to attract the talent you need to run your warehouse, whilst also minimising the impact of labour shortages in the near future, optimising your operation for years to come.

 

 

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Is your warehouse Brexit ready? - Make the most of your existing warehouse space to prepare

Five tips to ensure your warehouse is Brexit ready...

Avoid the rising cost of warehouse space

 

1. Avoid paying over-inflated warehouse prices!

 

Instead, look to make the most of your existing setup by reviewing your current operation. Identify how it's changed over the years and whether you will need to reconfigure your setup to make the most of the space you already have.

 

Reconfigure

Maximise the height of your warehouse with a mezzanine floor

 

2. Make sure you're using the full  height of your warehouse

 

It's easy to forget that your warehouse may have an untapped resource, i.e. its height! A mezzanine floor or multi-tier system could utilise this space more effectively, providing you with the additional capacity you need.

 

Maximise

Leave enough space for your warehouse despatch area

 

3. Leave enough space to prevent mix-ups and accidents

 

Your shipping and receiving areas should be separated in order to eliminate potential bottlenecks. With efficient space planning, your pick, pack and despatch setup should help - not hinder - your operational flow.

 

Plan

Avoid the rising cost of warehouse space

 

4. Introduce semi-automated systems to ease the skills shortage

 

If your warehouse operation is struggling to find workers you may have to look at alternatives. Aside from increased wages and incentives, you could augment your operation with a semi-automated solution.

 

Automate

Avoid the rising cost of warehouse space

 

5. Utilise temporary warehousing to ease the inspection burden 

 

If you need to reconfigure due to changes in the inspections process then a 'pop-up' warehouse could be useful. This structure can then be dismantled and recycled should a new customs arrangement be agreed in the future.

 

Temporary

Final thoughts: Use Brexit to your advantage  

 

To conclude, we hope this think piece has given you some key takeaways to consider in regards to preparing your warehouse operation, not just for Brexit, but also in the years to follow.

 

After all, if you have an agile warehouse that is flexible enough to meet the demands of the future it can not only be deemed as a competitive advantage for a forward-thinking business, but it will also help to enhance your warehouse and logistics operation overall.

 

If you feel your warehouse needs to be reconfigured in order to overcome your operational limitations then get in touch! Our experts would be happy to have a chat to see how we could help.

 

 

*Friday the 29th March 2019 is the current date for the departure of the United Kingdom from the European Union. This could be subject to change depending on the outcome of the current negotiations.

 

 

Post by Adam Bissmire-Mullen