Warehousing and  Logistics Trends for 2019

 

At SEC Storage, we're always looking to keep our finger on the pulse of emerging trends that are developing within the warehousing and logistics industry. Warehouse storage systems are, after all, what we design, install and sell as a business, and a crucial cog in the wheel of the logistics industry.

 

In our 2019 update, we wanted to take a look at some of the key trends that will be emerging over the next year and beyond, including the rising cost of warehouse space; labour shortages, and, of course, the elephant in the room... Brexit. Read on to find out more...

 

 

Banner Picture: Photo by chuttersnap on Unsplash

The rising cost of warehouse space

 

One trend that has been hard to miss for those within the industry is the sharp increase in rents for warehouse and industrial spaces. “In the nine months to September 2018, industrial and logistics rents rose by 2%, which in the scale of these things is a lot," comments, David Thame, Contributing Editor of Property at SHD Logistics. "In the year to September 2018 they rose by 4.3%, which is almost eye-wateringly fast,” adds, David.

 

These sharp rises are being bumped up by slowing demand for retail and office space. Sally Duggleby, Head of UK Industrial & Logistics Occupier Services at Savills, says “the supply of warehouses has fallen dramatically. In 2009, almost 100 million sq/ft of warehouse space was vacant. Today, that figure is 28 million sq/ft, reflecting a current vacancy of just 6%.”

 

Thanks to the rise of E-commerce, warehouse demand has never been stronger. However, with the rising costs of rent and more businesses sadly falling by the wayside, there is more space emerging. "In 2019, for the first time in nearly five years, occupiers of warehouse space will have a good supply of vacant buildings across the country..." adds, David Thame. So, space is available, but how much are you willing to pay for it?

 

Running out of space? Make the most of your existing facility with a mezzanine floor.

The rising cost of warehouse rents

Labour shortages

 

Labour shortages are impacting various sectors across UK industry. Record numbers of people are currently in work, which is great from a general employment perspective, but from a hiring perspective, it is becoming increasingly difficult to fill the skills gap. “The lack of attractiveness of warehousing jobs is demonstrated in a recent report by the UK Commission for Employment and Skills, which found that only 9% of the industry’s existing workforce is under 25 years old,” comments, Dave Berridge, Secretary of the Automated Material Handling Systems Association.

 

The Recruitment & Employment Confederation (REC), “found that 60 per cent of recruiters operating in the warehousing sector recruit at least half the temporary staff they supply from the EU, with almost three in ten (28 per cent) saying Europeans make up three quarters or more of their agency workers,” comments Peter Ward, CEO of the UKWA (United Kingdom Warehousing Association). 

 

With Brexit on the horizon and the Government's new policy regarding the UK's future skills-based immigration system to come into play, the warehousing industry will have to consider offering additional perks, including increased wages, flexible working, and other schemes in order to recruit new talent into the workforce.

 

Struggling to recruit workers? Increase pick efficiency with a semi-automated, dynamic racking solution.

 

Image: voltamax on Pixabay

Labour shortages in the warehousing industry for 2019

The elephant in the room… Brexit

 

Brexit has engulfed our daily news feeds here in the UK for the best part of three years. As the March deadline fast approaches, we're still uncertain as to how it will all play out, and this lack of direction has left businesses feeling uneasy, with many unsure on how they should proceed moving forward.

 

The CILT (Chartered Institute of Logistics and Transport UK) has been advocating the importance of the AEO (Authorised Economic Operator) accreditation, “as a means of supporting international supply chains in customs applications and processing,” sourced via the ‘The Essential Guide to Handling, Storage and Distribution, 2019’. “Currently, only 600 companies in the UK are AEO accredited compared to the 5,000 German operators,” adds the CILT. Many companies will need to look at acquiring additional accreditations in order to ease the customs and inspections process after Brexit hits.

 

Brexit poses a major challenge to both UK and European businesses moving forward, and although investment has slowed in some areas, in other places it has, in fact, gone the opposite way. "In the summer quarter of 2018 alone a total of £1.8 billion was invested in buying UK sheds," comments, David Thame of SHD Logistics, which shows that although other industries may be slowing down, the warehousing and logistics sector is following a very different path.

 

Concerned about Brexit? Then make sure your warehouse is configured the best it can be!

 

Image: Elionas2 on Pixabay

Brexit's impact on the warehousing industry
Is your warehouse Brexit ready?

Warehouse and Logistics Trends for 2018

Take a look back over last years trends...

Automation in the warehouse

 

Automation has been a hot topic of late in the warehouse storage industry, and here at SEC Storage, we have noticed a rise in the number of clients who are looking at semi-automated and automated warehousing solutions for their operations, including pallet live, pallet shuttle systems and semi-automated warehouse conveyors

 

This rise in interest for automated systems could well be influenced by factors such as the ongoing skills shortage currently occurring in the UK, which could be further impacted by Brexit; the need to further optimise existing operations, along with developments in eCommerce and next day delivery demands. "Robotic solutions offer the ability to introduce automation into DC operations without the need for major structural alterations," comments Rob O’Byrne, Founder of Logistics Bureau. So it's no wonder that automated systems are starting to look like an attractive prospect.

 

Although these highly-sophisticated, automated systems are usually reserved for the elite of the industry, we believe that smaller warehouse operations will start to consider a move towards semi-automated solutions, acting as a stepping stone to full automation over the coming year and beyond. Watch this space!

 

Image 3: Photo by Alex Knight on Unsplash

Automatic pallet racking systems - pallet shuttle system
Automation in the warehouse - pallet live system


Thoughts on automation in the warehouse?
 

"While system-guided manual processes can make a considerable difference to warehouse efficiencies, the value of full automation—perhaps the holy grail of distribution centre operation—is typically the preserve of corporate giants able to build purpose-designed automated warehouses."


- Rob O’Byrne, Founder of Logistics Bureau

Robotics in the warehouse

Safety in the warehouse

 

Health and safety in the warehouse industry has become a major topic of discussion in recent years, and what with the rise of fatalities from accidents at work in the UK rising in 2017 (according to the HSE) further measures must be taken to reduce this number to 0.

 

Chris Hopkirk, Sales Director at Warehouse Partners comments: "In my opinion, warehouse managers have to engage with their suppliers of warehouse equipment to ensure they understand their responsibilities. A lot of assumptions are made that the supplier covers this, and indeed many do, but the warehouse manager has a responsibility to ensure their staff are protected. The key tasks here are carrying out a risk assessment and safe system of work. If this is done then they are taking reasonable measures to protect their staff." In the world of health and safety, it seems there is a lot of finger pointing as to who's responsible, and this attitude must be changed moving forward.

 

Simon Docherty, an RTITB Instructor (via SHD Logistics) adds, that "communicating strong health and safety messages from the top down through to all employees in an organisation, can both improve safety and ensure legal obligations are met." Companies are becoming more aware of the legal implications they face by not having an effective health and safety policy, and we can only see this becoming more prevalent.

 

Health and safety is a topic that SEC Storage is highly passionate about, and for the purpose of this blog, we decided to ask some of the industries leading professionals and organisations for their best tips on how to maximise safety in the warehouse. Take a look at our 'Tweet Wall' further below.

Safety in the warehouse
Warehouse safety measures - wire mesh netting


What do you think one of the key trends will be in the warehouse safety industry in the year ahead?

"A move to clearer and more durable personnel segregation in warehouses involving clear walkways, protection and signage."

- Chris Hopkirk, Sales Director at Warehouse Partners

Warehouse safety barriers

We asked the H&S experts and they answered...

 

What simple measures can warehouse managers introduce
in order to ensure the safety of their employees?

Lack of warehouse space

 

According to legal firm Addleshaw Goddard, cited by Whichwarehouse, "the UK urgently needs more than 18 million square feet of new warehouse space." "Demand for large warehouses is continuing to outstrip supply" states The Telegraph. Another concern within the industry is the conversion of industrial space into leisure space; a trend that has become quite prevalent in London in particular. David Thame, Contributing Editor for Property at SHD Logistics comments "Deliveroo and its rivals are now expanding into so-called dark kitchens (take-away preparation areas), and according to JLL's Head of Industrial Research, Jon Sleeman, this "level of expansion (by Deliveroo and its rivals) is not insignificant. There could be far more significant users of industrial floorspace" in the future.

 

One thing's for certain, when your operation is in desperate need of expansion and you can't find any additional space, you should think about how you can maximise your existing facility. A mezzanine floor or multi-tier system can allow you to build upwards, maximising the height of your building whilst adding more storage capacity to your existing footprint.


"The UK’s largest industrial property developer [Segro] has sounded the alarm about the depletion of warehouse sites in London, arguing that a rush to build new homes is leading to a shortage of land for fast-growing e-commerce hubs" according to The Financial Times. This is a trend that people in the industry (and especially those who are looking to expand their operations) should keep a close eye on in the coming year.

Lack of warehouse space available for businesses
When you cant go out go up - warehouse multi-tier system


Will the recent trend of converting industrial space into leisure space continue in 2018?

"So long as the economy looks good, landlords would prefer to let to traditional warehouse users rather than leisure users."
 

David Thame, Contributing Editor, Property
- SHD Logistics

Multi-tier - plan view

So there you have it, our top three trends for 2018. We think this could be a year for major change in the warehousing and logistics industry, what with the Brexit deadline date of March 2019 on the horizon and various developments in technology. Whatever happens, we'll be sure to keep you updated via our blog. Until next time.

 

 

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Post by Adam Bissmire-Mullen