CEO BLOG: Logistics in the Limelight

November 24, 2020

As we approach the end of this extraordinary year, the long-predicted ‘perfect storm’ has come to pass and we face the impacts of a global pandemic, a peak season that will see unprecedented pressure from massive growth in online shopping and all as we approach the departure of the UK from the European Union on January 1st 2021.

Indeed, in my forty plus years in this industry, never have I witnessed anything quite like this.

Freight rates have been driven through the roof as shipping companies combat shortage of empty containers in key locations, with port congestion becoming a serious global issue as supply and demand dynamics and trade patterns adjust to changing consumer behaviour worldwide.  Here in the UK ships are forced to divert to alternative ports or skip the UK altogether, instead dropping UK cargo on the continent. Air freight cannot provide a solution as there is currently insufficient capacity while passenger aircraft are grounded due to COVID restrictions.

Meanwhile, there is a  build-up of stock ‘here, there and everywhere’ as all non-essential retail outlets remain closed during the second COVID lockdown, traders build up extra stock in preparation for Brexit and vast areas of warehouse space are being taken up by PPE, (estimated to be as much as 2.5% of the total capacity – ie 3 million sq ft or 300,000 pallet locations), all of which are combining to create a shortage of warehousing space – our recent survey suggests capacity is running at 98%, which is more or less full!

Containers continue to flow into UK from the Far East and other parts of the globe, driving demand for off-dock container storage – suitable sites have been identified by UKWA and others, but so far these are without planning consent.

There is also a shortage of pallets as exporters and 3PLs are keeping hold of them in preparation for 1st January, when ISPM compliant pallets will be a requirement for export to EU, and despite the climbing youth unemployment figures we are still witnessing labour shortages as many young people decline the opportunity to work for minimum wage.

But, here’s the good news. This cataclysmic year has put our great industry right at the heart of our national life. Warehousing and logistics has finally emerged from behind the scenes and taken centre stage. We have been recognised as the vital sector that keeps the country going in good times and in bad, and here at UKWA we are proud to be playing our part.

We have continued to keep our members and the policy makers informed, transferring knowledge and sharing best practice, offering expert advice as well as practical solutions to help deal with some of the challenges members are facing.

Accordingly, we have seen our membership growing as businesses turn to their trade association for support in these tough times. Our small, but dedicated team, working from home, have continued to respond to members and ensure that as far as possible we have delivered a ‘business as usual’ service.

UKWA pledges to continue to engage with government and disseminate the latest information from the sector; our commitment is to build on the industry’s newly raised – and well-deserved – national profile and ensure that the voice of the industry is heard, loud and clear.

Peter Ward, CEO UKWA