Pressures build for ‘essential’ warehouse operators

April 2, 2020

In his latest blog, UKWA CEO Peter Ward considers the mounting pressures on warehousing operators as a result of the Covid-19 lockdown, and argues for a package of special measures from the government to support a sector of ‘essential’ workers currently on the frontline keeping the nation fed and the NHS supplied.

“Warehouse operators are facing extreme pressures as the Covid-19 crisis and consequent global lock down looks likely to stretch for many more weeks, if not months. Those serving the food and ‘essential’ supplies sector are struggling to maintain a ‘business as usual’ service during the Covid-19 crisis, in the face of a massive spike in demand, while having to observe government guidelines on social distancing to keep their workforces safe.

Meantime, those operating in the ‘non-essential’ space are feeling another kind of pain. With outbound flows severely reduced or stopped altogether as stores are closed, inbound flows have become literally a mounting problem. Inbound supply chains cannot simply be turned off, orders placed and dispatched before the lock down will continue towards destination, arriving at ports, requiring receipt, handling, onward distribution and storage.

Clearly, warehouses in this situation are quickly reaching capacity, and if they cannot accept any more goods, the consequences potentially could be catastrophic – blockages upstream in the supply chain, fully loaded containers and trucks unable to discharge, ports unable to cope with the backlog, ultimately prevention of the flow of essential supplies such as food and pharmaceuticals.

Then of course, there’s the financial impact for the sector. While storage revenue alone may cover fixed costs for some, reduction of RH&D will reduce profitability for most, and may even put some operators at risk of closure. This situation is being exacerbated further by deterioration of cashflow as locked down customers struggle with drastic drops in income and as a result can’t or won’t pay their bills.

Warehouse operators are in the frontline of this crisis, including those who are not handling essential goods. Attempts in some parts of the media to portray them as businesses risking the health of their staff in pursuit of profit is deeply unfair and also deeply unhelpful at this difficult time.

It falls to UKWA, as a leading voice of the industry, to bring to government’s attention the particular plight of our sector and the need for a special package of measures to support those who are keeping our nation fed and our NHS provided with crucial supplies.

Already we have introduced a warehouse space matching service for those desperate for more storage and are working with recruitment specialists Harri to help transfer workers from the hard-hit hospitality industry into warehousing and logistics jobs. In addition, along with peer trade associations, UKWA has submitted the case to government and this week, we have commissioned a survey of members to understand and monitor what is actually happening ‘at the coalface’.

We will continue to cascade and share the latest government updates, foster best-practice in warehouses and, armed with data from the industry survey we rolled out this week, we will be providing government and the media with real-time evidence to lobby for additional support to safeguard our members’ businesses through this difficult period.

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