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Logistics and Smart Warehousing

Retail is suffering but logistics and warehousing are thriving. Peter Hemple reports

Thousands of high street jobs have been lost during the coronavirus pandemic, as retail chains have fallen under the pressure of lockdown restrictions. The UK high street, which was already struggling before the pandemic, is set to look very different when shoppers return again after lockdown, following 15,000 shop closures that have lost an estimated 176,000 retail workers their jobs, according to figures from the Centre for Retail Research.

However, in early February, CBRE reported that retail investment in central London had more than doubled in Q4 2020, compared to Q4 2019 as emerging brands took advantage of discounted central London property. Deals between October and December accounted for 55% of all central London retail investment transactions last year.

But there is no denying that a fundamental change to how we shop has been taking place for years, and that this has accelerated during the pandemic. Online sales in the retail sector saw five years of growth in just 12 months in 2020, according to a recently released NatWest Retail and Leisure Outlook Report 2021, which added that online sales accounted for 28% of retail spending in 2020 - up from 19% in 2019.

Bad for retail, good for warehousing
Peter Ward, chief executive at the UK Warehousing Association, wrote in February: “The global pandemic has exposed the risks of long, interconnected supply chains, possibly heralding the end of globalisation and driving the move to near and on-shoring. This is positive news for UK warehousing, and is part of the story – along with the massive acceleration of e-commerce – behind the record take-up figures for industrial and logistics property reported by the real estate sector for 2020. Both of these trends look set to continue into 2021.”

But this surge in demand combined with Brexit is causing problems. Ward added: “UKWA’s long-held view has been that overall Brexit will be good for our sector, as more warehousing will be required. However, our members are reporting full loading bays, with thousands of orders for the EU delayed. We are hearing stories of pallet and parcel deliveries into the EU at a standstill due to missing or incomplete paperwork, and problems over the calculation and payment of VAT. Costs are spiralling and warehouses are struggling with flow and shortage of working space.”

Demand is rising for ‘smart warehousing’
Efficiency is everything for warehouses at the moment and once again, humans are failing to be as efficient as computers. A smart warehouse automates workflows, material flows, and operations using mechatronics equipment & Internet, IoT systems coupled with sensor technologies. This enables data flow with the material and each machine is able to communicate with each other. A smart warehouse should increase profitability by curbing and eliminating losses and should be able to move goods faster to customers.

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