In order to stay ahead of the game during 2019 and beyond, businesses need to be aware of the latest warehousing trends and technology that could enhance their business productivity and efficiency.
Below are some of the key warehousing trends that will be emerging over the next year and beyond, including the rising cost of warehouse space; automation, labour shortages, and of course Brexit.
Increase in warehouse space costs
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.
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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?
Shortage of skilled warehouse workers
Labour shortages are impacting various sectors across UK industry and is a hot topic when it comes to warehousing trends this year. 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.
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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.
The Brexit challenge
Brexit has engulfed our daily news feeds here in the UK for the best part of three years and will affect the warehousing trends this year. 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.
Automation in the warehouse
Automation has been a hot topic of late in the warehouse storage industry, and 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.
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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.
The modern WMS does this by deploying itself in the cloud as well as your warehouse, granting you improved visibility and the leverage you need to make smarter warehouse decisions. From faster upgrades and quicker support conversations with vendors to a system that is always able to process orders or make updates when your power goes out, there are plenty of big benefits for adopting a cloud warehouse management system (WMS).
Clarus can help you maximise your warehouse with a cloud WMS solution. Increasing demand for faster order fulfilment by consumers requires an effective solution to managing warehouses. Also, the number of competitors in the market is rapidly growing as more companies create omnichannel supply chains capable of filling orders faster than ever before. Rather than muddling through endless paper trails and inefficiencies, you can optimize operations. Think of how these benefits of a warehouse management system can translate into real-world savings and catalysts to your bottom line.
Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.