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Survey – tell us about the Warehouse of the Future 20/06/2018

Industry-leading magazine Handling & Storage solutions is asking YOU - its readers - to tell us the key trends you observe in the warehouse and logistics sector and make predictions for the warehouse of tomorrow.

Your opinions, thoughts and ideas will be used in a ground-breaking Report that will shed light on these vital issues and trends.

What’s more, it will – uniquely – be led by your collective wisdom! We’ll look at a very broad spread of issues – to give us as complete a snapshot as possible of where logistics is at as we approach Brexit, and many other challenges, in 2018.

Take the survey here - http://bit.ly/2ydkcsG - it should take around ten minutes to complete.

You will be entered into a draw to receive £100 of Amazon Vouchers when you complete this survey!

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M&S admits Castle Donington DC ‘struggling with peaks’ 23/05/2018

Marks and Spencer has expressed frustration at inefficiencies at its Castle Donington fulfilment centre and disappointment with the rate of growth in its online sales.

The company’s full-year report read: “Although our online sales are growing, our online capability is behind the best of our competitors. Our fulfilment centre at Castle Donington has struggled to cope with peak demand and some of our systems are dated.”

The retailer said it was ‘investing to increase and improve eCommerce capacity’, including at Castle Donington in order to support its ambition to double the online share of its Clothing & Home sales to over 33%. M&S is also building a new retail distribution centre at Welham Green. ‘Teams have been established to address the supply chain issues in both main businesses, to deliver a faster, lower cost network’, the company said.

M&S acknowledged its supply chains in both Clothing & Home and in Food require significant upgrades, so it can be faster to market, reduce high stock levels in clothing, and improve availability and waste in food. 

Marks and Spencer is pushing ahead aggressively in its shift to online, as outlined in its full year results to 31 March 2018, in which it recorded a 62% drop in pre-tax profits.

The report added: “The continued migration of clothing and home online, the development of global competition, the growth of home delivery in food and the march of the discounters all amount to threats to our business and market position. These, together with a challenging UK consumer market, mean that we have to modernise our business to ensure we are competitive and reignite our culture. Accelerated change is the only option.”

Over 100 M&S stores will close in total by 2022 as part of the radical pivot to online.

This includes 21 that have already closed and the 14 stores announced yesterday as proposed for closure or set to close.

Steve Rowe, Marks & Spencer CEO said: “At our half year results in November I outlined the need for accelerated change at M&S. The first phase of our transformation plan, restoring the basics, is now well under way and the actions taken have increased the velocity of change running through our business. These changes come with short term costs which are reflected in today’s results.

“There are a number of structural issues to address and we are taking steps towards fixing these. The new organisation will largely be in place by July and the team is now tackling transforming our culture to make M&S a faster, lower cost, more commercial, more digital business. This is vital as we start to leverage the strength of the M&S brand and values across a family of businesses to deliver sustainable, profitable growth in three to five years.”

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High fulfilment costs sink Tesco Direct 23/05/2018

Tesco Direct will cease trading on 9 July 2018 with the company intending to close the fulfilment centre at Fenny Lock which handles Tesco Direct orders.

Tesco conducted a detailed review of Tesco Direct, its non-food website, and has concluded that, despite its best efforts, there is no route to profitability for this small, loss-making part of the business.

Tesco Direct has faced a number of significant challenges, including high costs for fulfilment and online marketing, which have prevented it from delivering a sustainable offer as a standalone non-food business.

Tesco remains committed to bringing a compelling range of general merchandise to its customers, both in-store and online at Tesco.com. It is Tesco’s ambition to create a simpler online experience for customers, allowing them to purchase general merchandise, clothing and groceries all in one place.

Approximately 500 staff will be at risk of redundancy. 

Charles Wilson, CEO of Tesco UK & ROI, said: “This decision has been a very difficult one to make, but it is an essential step towards establishing a more sustainable non-food offer and growing our business for the future.”

Tesco’s Fenny Lock DC was initially closed in 2011 but re-opened shortly after, following a review of operations.

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Appeal for information after forklift stolen 22/05/2018

Police in Fife are appealing for information following the theft of two high-value vehicles from a farm near Kirkcaldy.

Officers were called to Begg Farm, Cluny on Monday 23rd April after the theft a forklift and a tractor.

The Manitou Mani Reach Forklift is red in colour, valued at £12,000 and has the registration number SP08 BZG.

The John Deere 6830 tractor is green and yellow in colour, is valued at £40,000 and has the registration number SP11 AAE.

Both vehicles were stolen between the hours of 4pm on Sunday 22nd April and 8am on Monday 23rd April.

Contact Crimestoppers anonymously on 0800 555 111 quoting incident number 0540 of 23rd April.

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Tesco fined £1.6m after loading bay injury 21/05/2018

A delivery driver ran into a customer when taking part in an unassisted reverse at a Tesco Metro store in West London, causing the victim to become stuck between the loading bay and the vehicle.

The impact caused the victim, who was a self-employed tradesman, to suffer a number of serious and life-changing injuries.

The supermarket chain was prosecuted by Ealing Council and pleaded guilty to two offences dating back to August 2014.

On 4 May 2018 the judge at Isleworth Crown Court imposed a fine of £800,000 for both offences, totalling £1.6 million, with Tesco also agreeing to pay the council’s costs of £50,000.

A prolonged and detailed investigation by the council’s health and safety team established that Tesco failed to manage the risks of vehicles and pedestrians both using the car park of the premises, which is open to the public at all times. The organisation also failed to notice that drivers were often reversing on site unassisted, which was contrary to its internal procedures.

The investigation has led to improvements being made to the layout of the car park, including installation of barriers preventing access to the car park by private vehicles and pedestrians when delivery trucks are manoeuvring on site.

Councillor Julian Bell, Leader of the council said: “I am very pleased that the court has recognised the seriousness of these offences and imposed a fine reflecting this.

“We will always the prioritise the safety of local people and this investigation has secured changes to the layout of the car park in question which will hopefully reduce the chances of another tragic incident such as this occurring.

“Our health and safety team will not hesitate to take action against any organisation – large or small – who fails to comply with their obligations to protect their employees and others affected by their activities.”

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Supply chain seen as ransomware cyber attack weak link 17/05/2018

2017 saw a worrying increase in ransomware and other cyberattacks targeting the supply chain, with the business and professional services sector receiving a significant increase of attacks, particularly in the EMEA region, which saw 20% of all attacks targeting this sector.

This is according to Dimension Data, which has published a report on cyber-threats.

Mark Thomas, Dimension Data’s Group CTO for Cybersecurity said: “There are numerous moving parts to supply chains and outsourcing companies, which often run on disparate and out-dated network infrastructures, making them easy prey to cyber threat actors. Service providers and outsourcers are also a prime target, due to their trade secrets and intellectual property. Businesses need to wise-up to the very real threats against them, and ensure all aspects of their operations are robustly and securely protected.”

In 2017, there was a 350% rise in ransomware, representing 7% of all global malware attacks (up from 1% in 2016), and is set to continue due to the popularity of cyber adversary campaigns.

In EMEA, ransomware accounted for nearly 30% of cyberattacks compared to the global average of 7%. EMEA was also the only region in which ransomware was the number one type of malware due to various cyberattack campaigns, including the WannaCry and NotPetya epidemic.

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US automation firm buys Danish industrial robot specialist 15/05/2018

Teradyne has acquired Mobile Industrial Robots (MiR) for €121 million net of cash acquired plus €101 million if performance targets are met by 2020.

MiR is a leading supplier of collaborative autonomous mobile robots (AMRs) for industrial applications.

The AMR market is an emerging category within the approximately $1.1 billion logistics systems segment of the professional services robot market and is expected to grow rapidly in the years ahead.

Mark Jagiela, president and CEO of Teradyne said: “MiR is the market leader in the nascent, but fast growing market for collaborative autonomous mobile robots (AMRs). Like Universal Robots' collaborative robots, MiR collaborative AMRs lower the barrier for both large and small enterprises to incrementally automate their operations without the need for specialty staff or a re-layout of their existing workflow.  This, combined with a fast return on investment, opens a vast new automation market.  Following the path proven with Universal Robots, we expect to leverage Teradyne’s global capabilities to expand MiR’s reach.”

MiR was profitable in 2017 with annual revenue of $12 million USD.

Teradyne is a leading supplier of automation equipment for test and industrial applications.

You can see the MiR industrial robots in action here.

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3PLs forming end-to-end healthcare logistics strategies 15/05/2018

To increase revenue and market share, 3PLs are improving packaging and delivery systems, entering quality agreements with partner firms, and investing in temperature monitoring, according to Sharan Raj, a lead analyst for logistics research at Technavio.

Technavio’s latest market research report on the global healthcare logistics market predicts close to 6% CAGR growth over the period 2017-2021.

The common challenges faced by many logistics vendors in the healthcare logistics sector are maintaining constant temperatures and dealing with highly complex supply chains during manufacturing. Logistics vendors have great potential for improving their services by providing efficient systems to cater to the temperature-sensitive pharma segment of healthcare.

Logistics vendors are providing cold chain management services to end-user customers and participating in their decision-making processes. Many logistic service providers offer end-to-end cold chain management services, such as inventory management, order scheduling, order forecasting, warehousing, and delivery management. The increase in the provision of end-to-end integrated services by vendors is a trend that is expected to reflect positively on the growth of the global healthcare logistics market during the forecast period.

Cold chain operators must continually upgrade technology to ensure integrity, efficiency, and safety. This includes both front-end devices and back-end IT infrastructure to gather and report key shipment data in real time. For instance, cold chain carriers have increased the use of on-board equipment built into refrigeration units to track location and temperature and to make these data available to shippers and third-party logistics in real time. This provides opportunity and visibility to shippers to prevent or mitigate loss.

Technavio has research key vendors such as DB Schenker, Deutsche Post DHL, KUEHNE+NAGEL, CEVA Holdings, and FedEx.

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Demand for warehouse space strongest in three years 14/05/2018

Demand for UK logistics space continues to be resilient with the first quarter of 2018 being the strongest for the past three years, according to research from Cushman & Wakefield.

Total take-up of logistics space in the first three months of 2018 climbed to 10.2million sq ft, outpacing the same quarter last year by 60%. The purpose-built share of the market was especially strong indicating that many occupiers are looking beyond Brexit and taking longer-term commitments.
 
In the first quarter, purpose-built deals accounted for 35% of the total number of transactions and 67% of total take-up (by sq ft). Retailers (including eRetailers) took the lead over manufacturers during the first quarter, accounting for 57% of take-up.
 
UK omni-retailers have been busy ensuring their portfolios support the changing nature of their businesses as online sales account for an increasing share of total turnover. M&S’s decision to close its Neasden site in North-West London to open a new 495,000 sq ft distribution centre north of the M25 is an example of this type of restructuring. Meanwhile, H&M plans to consolidate eFulfilment activities in a new 750,000 square feet purpose-built facility in Milton Keyes later this year.
 
The research also shows that take-up by pure online players is on the rise, accounting for 24% of total retailer take-up in the first quarter. After a pause in its network expansion at the end of last year, Amazon resumed its growth plans to sign a 500,000 square foot purpose built deal at East Midlands Gateway Park.
 
With Shop Direct taking another 550,000 square feet, East Midlands Gateway ended the quarter accounting for 78% of total pure player take-up.
 
Regionally, the Midlands and South-East accounted for the lion’s share of Q1 take-up of 79%. Meanwhile, other regions had their fair share of large deals including Premier Farnell (360,000 square feet) in Yorkshire and B&Q (375,000 square feet) in the South West.
 
Bruno Berretta, UK Logistics & Industrial Research & Insight, Cushman & Wakefield, said: “High levels of demand during the first quarter of this year point to continued robust performance for the remainder of 2018 for the UK logistics sector. While Brexit and pricing concerns are intensifying, strong market fundamentals support an optimistic outlook.”
 
Gordon Reynolds, Partner, Logistics & Industrial Agency, Cushman & Wakefield, said: “Online retail will remain the primary driver of growth in demand for logistics space including larger fulfilment centres and last-mile depots, allowing retailers to serve more efficiently an expanding and more demanding customer base.”
 
From an investor perspective, diminishing levels of developable land, particularly in key logistics locations like the West Midlands and near the M25, along with new entrants to the UK market, means that bidding on the limited amount of available land is increasingly competitive. In fact, Panattoni was the latest developer to enter the highly competitive UK market, recently announcing a speculative development programme that plans to target up to 3 million square feet of new product annually.
 
Prime rents grew at record levels during 2017, according to the report. Nearly a third of the 73 submarkets covered by Cushman & Wakefield, registered double-digit increases in prime rents during the calendar year. Virtually flat prime rental growth during the first quarter suggests that last year’s rental growth performance is unlikely to be replicated during 2018.
 
Longer-term, supply constraints combined with a diverse occupier base that includes a growing number of online retailers, point to the strongest rental growth prospects in the South-East, particularly for urban depots.
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Property implications of proposed Sainsbury’s-Asda merger could be huge 01/05/2018

With the eCommerce phenomenon turning traditional retail on its head, a property company has indicated the real gain of the proposed merger could be in combined warehouse portfolio, as opposed to retail units.

Len Rosso, head of industrial & logistics at Colliers International said: “The integration of Sainsbury’s and Asda’s respective industrial infrastructures across the country will not only achieve significant economies of scale, and therefore big savings, but there is also a great opportunity to reduce their supply chain costs.

“The phenomenal growth of industrial market in the last few years as a result of eCommerce means their large warehouse portfolios could be worth more than their retail units, providing real cash benefits. With industrial yields at historic lows, these assets could provide better returns to investors than their shops.”

Sainsbury and Walmart have agreed terms in relation to a proposed combination of Sainsbury's and Asda.

The combination will result in Walmart holding 42% of the issued share capital of the Combined Business and receiving £2.975 billion of cash (subject to customary completion adjustments), valuing Asda at approximately £7.3 billion on a debt-free, cash-free and pension-free basis. At the time of completion of the Combination, Walmart will not hold more than 29.9% of the total voting rights in the Combined Business.

The Combination will create one of the UK’s leading grocery, general merchandise and clothing retail groups, with combined revenues of c.£51 billion for 2017.

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