1/10 (1 to 10 of 95)
|Weird scenes inside the goldmine||22/02/2022|
THIS ISSUE we take look at warehouse property, an investor’s goldmine driven equally by the insatiable demand for space caused by eCommerce and scarcity caused by lack of space and tight planning laws.
Brokers speak in hushed tones about the unprecedented weight of capital being brought to bear on the market. While some of this money is used to fund new build, much simply inflates the value of existing stock. This in turn compresses yields for owners, who move to compensate by cranking up rents. So while it sounds like a good thing that money is pouring into our sector, it isn’t necessarily going to make things easier for occupiers. In fact, it’s likely to add considerable cost, and at a time when warehouse worker wages are on the rise too. Add to this the recalculation of business rates due next year, which is likely to increase the rates that apply to the burgeoning logistics sector and the cost of doing business in the logistics space could rise significantly. This could lead to a significant drag on economic activity and further price rises for the consumer.
Perhaps we can see a precedent in the housing market, where the golden ticket of scarcity and demand has consistently pushed house prices up for decades, even as the economy ebbed and flowed and wages stagnated. In short, it’s good news if you are sat atop that weight of capital as a warehouse owner. Not so great if you are under that weight, as a warehouse tenant. We predict this will lead to a profusion of warehouse space optimisation tactics, from temporary buildings to mezzanines and much more.
Smart move for Ocado?
Ocado has refreshed the technology behind its landmark Ocado Smart Platform. Cleverly, Ocado is using this to broaden its strategic options in the face of stiffer competition than it has ever faced in the warehouse automation for grocers market. Q-commerce and micro-fulfillment are both a threat and Ocado has responded by adjusting its tech in an attempt to counter this. For example, its new robot is much lighter allowing it to cut construction costs and time to install.
It has also unveiled the idea of the ‘virtual regional distribution centre’, basically using local warehouses, linked by software, to back each other up. It remains to be seen how this will work. Computer storage virtualisation works well because software is able to track bits of information stored across disparate locations and instantly recall stored data to the point on a network where it is needed. Fleets of vans on the road network are not bits of data on a broadband connection, however, and it remains to seen how efficiently different warehouses can realistically coordinate to the extent that each has impressive range without the cost of a shared RDC.
|HGV driver shortage - who takes the hit?||07/07/2021|
THE UK Government and haulage industry are between a rock and hard place on the HGV driver shortage, says HSS editor Simon Duddy.
On the one hand, one of the key arguments for Brexit was the opportunity to close the doors to ‘less-skilled’, lower paid foreign workers. That was identified as a vote winner by the Tory party and its success at the last General Election suggests it continues to pay off.
This means it will be politically difficult for the Tories to reach for the obvious short term solution to the HGV driver shortage. It could relax rules on EU lorry drivers and allow haulage firms to quickly hire the staff they need at (probably) reasonable rates, averting a crisis for the logistics industry, its clients and ultimately the consumer.
Industry is asking for this and it would be the quick solution. I suspect the Government will be very reluctant to go down this route.
If that’s the rock, the hard place is an increase in pay and conditions for lorry drivers. That would be the medium and long term solution, which would attract greater numbers of UK-based workers to the role.
But UK companies have benefited from low salary growth for many years and this has been as true for HGV drivers as anyone else.
It would therefore be hard for many companies to accept such a paradigm shift.
It is also a tough one for the Conservatives to encourage as better pay and conditions for workers is the tone you would expect from a left-wing Labour Government rather than the pro-business Tories.
The biggest danger for the country is that this predicament leads to paralysis. That is, without an easy decision to make, interested parties don’t make one, and the crisis builds.
The Government responded today, but it enough?
Transport Secretary Grant Shapps announced: “We’re aware of a shortage of HGV drivers, so I’m announcing a temp extension of drivers’ hours rules from Mon. 12 July, giving flexibility to drivers & operators to make slightly longer journeys.”
The move drew industry criticism.
Rob Wright, executive director of logistics consultancy SCALA said this was a ‘backwards step’.
“We do not want tired drivers of heavy goods vehicles on our roads. Instead, we need major investment in driver training to address the backlog caused by 28,000 cancelled HGV driving tests during Covid-19. Funding is also required to promote logistics as a more attractive career choice.”
Business group Logistics UK reacted with dismay at the announcement.
James Firth, the organisation’s head of road freight regulation policy, said: “The current workforce cannot be expected to fill the gaps created by the current skills shortage. The road freight industry vehemently opposed the extension of these vital road safety laws, yet the government has ignored the will of those who will be most affected by the changes.
“Existing drivers have been working flat out since the start of the pandemic, and this could be the final straw for many of them.”
Aside from safety concerns, pushing existing drivers to take longer journeys isn’t going to touch the sides of current demand.
A major investment is needed. Everyone knows that.
The question is who pays?
Is it the Government? If they relax EU migrant rules, they could take an electoral hit.
If they don’t, it surely falls on the industry to pay more to get more drivers from the native workforce.
Perhaps a middle ground could involve funding from Government to industry to assist a recruitment effort?
|Using existing assets||28/02/2021|
It is very interesting to see Asda adapt its stance to last mile in its latest consultation. The review comes less than a month after venture capitalists bought a controlling stake in the firm.
It proposes the closure of its two Dartford and Heston regional delivery hubs in the South East of England.
Instead, the grocer plans to serve the increasing number of customers shopping online by expanding its ‘in-store pick’ model – projecting the creation of 4,500 new roles in store-based online operations across the country.
It is an interesting move because it puts the emphasis very much on the existing assets within the group - store staff, store space and in-store stock. Perhaps as well as creating greater capacity, improving slot availability and allowing Asda to get deliveries to customers more quickly, it will also allow them to control costs? It has long been a tricky nut for retailers to crack, as home delivery is inherently more expensive than the store model. But with stores increasingly under-utilised post-pandemic, it makes sense to re-use these assets.
The alternative of cutting back sharply on these assets would certainly be more painful.
|Are old car parks the cavalry we’ve been waiting for?||09/12/2020|
There has long been a crisis in UK warehousing. The sustained growth of eCommerce throughout the last ten years has changed the dynamics of logistics in the UK profoundly, creating a demand for warehousing and delivery space close to centres of population that has not been easily met.
This might be about to get a bit easier. The pandemic has accelerated eComm even further but it has also accelerated trends such as home working, brought commuting into question and is helping to nudge people away from driving into cities, much like tightening regs on car emissions.
Looking at the future of urban transport (more bicycles, and shared ownership of electric vehicles perhaps?) the single occupant car driving into the city is unlikely to be a central part of it.
A by-product of this is that city centre multi-storey car parks are unlikely to be as heavily utilised as before.
You might not spend much time thinking about car parks, but if you do for a second, you’ll realise they are often in prime urban locations.
So why not use this soon-to-be-dead space to help with last mile logistics?
This is in its early days, but we are already seeing initiatives in major capitals such as Berlin and London.
The London Wall Car Park in the City will see 39 car park scares repurposed as a last mile logistics hub to be operated by Amazon Logistics.
After all, what else should we use the old car parks for? More flats? Mushroom farming?
Urban logistics is certainly attracting investment, such as MARK recently raising 500 million euros to invest in sites across the EU.
|Tackling key topics at HSS Live!||25/11/2020|
HSS Live! is coming up on December 1. I’m really looking forward to hosting this webinar series. It has a great roster of speakers, it’s free to attend, you can dip in and out as you like, and you gain CPD as well. Furthermore, the content will be available on our website to view going forward.
It’s certainly hitting some major operational hot spots that will be familiar to many.
Robots & Automation
Robotics are offering a way to bring warehouse automation to the masses. Once upon a time, warehouse automation required major infrastructure and cost up front. That isn’t necessarily so now. Modern warehouse robots - autonomous mobile robots (AMRs) - are relatively fast and inexpensive to deploy. The key word here is scalability. You can start small and build up as demand and economic rationale dictates.
To explain this trend, we have one of the leading players in this sector - Locus Robotics - and its VP, Europe Denis Niezgoda to talk you through this crucial issue and the big impacts it can have on warehouse efficiency.
On the automation side, we also have Shane Faulkner, Head of Sales, Swisslog presenting on ‘Off the Shelf’ automated solutions within 3 months. Webinar attendees can discover how solutions such as AutoStore and CarryPick can be delivered in as little as three months. With pre-defined layouts, these ASRS technologies can be adapted as demand changes and can be installed in existing buildings. Depending on the project specification, it is even possible for the flexible systems to be rented or leased to preserve liquidity exactly when you need it.
Warehouse space is another key battleground for operators that is at a critical point of change due to the rise of eCommerce, the pandemic, Brexit and more. To illustrate how smart design, and the right combination of storage infrastructure and forklifts can bring about a sea change in warehouse space optimisation, Martin McVicar, MD, Combilift explains how the company’s products have enabled a major packaging supplier to optimise its warehouse space while keeping up with its ever growing production schedule.
But frankly, it’s not enough to purchase a system and cross your fingers. And surprisingly, many firms do just that. They fail to think through the implications and fail to dig into the detail sufficiently. I spoke to a logistics manager earlier in the year and he said the biggest difference between a big automated warehouse project working or not, was allocating sufficient time and resource to making sure the software, old and new, works well together.
Nick Fox, Head of Logistics - Europe, at fashion retailer Theory also makes this point in as he tackles the growing trend of D2C (Direct to Consumer). The growth of D2C makes warehouse process accuracy more important than ever. But many retailers and brands think buying a system to cope is enough. Nick argues that the real work is ‘doing the detail’ and making sure IT and warehouse operations knit together effectively.
We’re turning to Kevin Mofid, Head of Industrial Research, Savills for a take on the bigger picture in UK warehousing. The initial shock of the pandemic has now passed but with logistics now well into its Peak season, Kevin Mofid discusses the logistics property landscape, demand trends and implications for warehouse and logistics managers.
|Could the non-food foothold be key?||02/11/2020|
The new market angle could be most important as Ocado makes two ambitious robotic tech acquisitions.
It was very interesting to see Ocado make two robotic picking acquisitions today.
Most of the focus will, understandably, be on the tech. Ocado already has a leading position in automated grocery warehousing for home deliveries. It is first class in terms of space utilisation, mechanical speed and precision, as well as software control.
This has allowed Ocado to diversify from its core position of online grocer to technology platform provider, as it has sold this system to a growing roster of leading retailers worldwide.
In tech terms, Ocado sees the acquisitions building on its own development in machine learning, computer vision and engineering systems and complementing them with better robotic arm tech. Indeed the Dexter HDI 7+ axis robot from Haddington Dynamics looks amazing.
However, one of the acquired companies, Kindred AI, has a considerable business in non-food warehouse automation. This foothold could offer Ocado a tasty growth opportunity. Suppliers such as Kindred AI are growing fast anyway, given the rise of eCommerce, and the accelerant of the pandemic - think of how much faster they could grow with Ocado’s cash, and engineering & marketing heft behind them.
This represents positive news for Ocado. Remember, last month, Norwegian warehouse automation technology provider AutoStore filed patent infringement lawsuits in the US and the UK against Ocado Group, alleging Ocado has infringed patents around its warehouse automation technology.
While this legal issue looks likely to rumble on, Ocado seems determined to push hard for growth regardless.
|Logistics industry: We don’t lock down, we knuckle down||15/10/2020|
I recently heard a great quote from Skechers logistics VP Sophie Houtmeyers, saying even when the world stops turning, logistics doesn’t stop.
How right that is. In fact, Skechers has experienced order growth, even post-pandemic. But having made a significant investment in staff and systems over the last five years, it has been in a position to support this unexpected growth.
Seize the opportunity. If growth does not present itself, then use the time to lay the groundwork for future business.
Now is the time to have a look at back office functions. Maybe you are relying on three delivery management systems when one would be optimal? Now could be the time to rationalise on to the best option. Maybe you’ve spent the last three years thinking about cloud-based warehouse IT? Now could be the time to get something done about it.
We are delighted to have a thoughtful column from Harry Watts of SEC Group, dealing with how you need to get on top of inventory changes six months into the crisis and deal with the implications this may have on warehouse storage and systems.
In the meantime, there is a lot to be proud of in the logistics industry. Just look at the grocery supply chain. It has been under a lot pf pressure, with acute volume fluctuations, and yet it has coped admirably. Imagine how much worse the situation would be for the public if this key sector did not have the planning, the systems and the hardworking staff to prevail.
Social distancing in the warehouse has had major knock-on effects on processes. Firms need to carefully plan pick waves to ensure workers are not crowding in the aisles.
This is important as we approach Peak. As warehouses refine their processes, matching waves to order profiles to get goods out quickly and accurately, they will have to also factor in social distancing rules. As a result, this could be a big Peak for automaton, with many retailers looking to see just how much of extra Peak volume can be handled by automated solutions, saving both on the cost of extra employees and also the potential safety headaches they would bring.
|Vaccine supply chain challenge||12/10/2020|
DHL and McKinsey’s recent Delivering Pandemic Resilience white paper on the challenges of supplying a Covid-19 vaccine worldwide, brought home a shocking, if not surprising, point.
With the pressure on to quickly produce a vaccine, the development process is being accelerated in a bid to create a viable vaccine as quickly as possible. This is understandable, and the Report suggests a vaccine could be available as early as this year.
The less encouraging news is that the trade off to this fast development, in one scenario, is lack of stability. The resulting vaccine may be based on a ‘platform’ that requires very low temperatures to be viable. This would mean a robust cold chain infrastructure is needed to store, handle and transport the vaccine effectively. This isn’t easy in the developed world, but it can be done. In much of the developing world, it is impossible.
In the white paper, DHL asks what special measures could be brought in to make it work? Perhaps drones could be used to quickly transport vaccines from cold chain hubs to remote areas, but the real challenge would be big cities in the third world. The only real solution is to develop the infrastructure and that obviously takes a lot of time.
The upshot is that while the developed world may roll out a vaccine in 2021 and be largely rid of this, the developing world may be living with it for years to come as a more stable vaccine is developed.
It would be a massive undertaking, but perhaps more should be done to build cold chain infrastructure in the developing world? Even if it arrives too late to help with Covid-19, it will assist with other health related problems, as well as providing infrastructure to store perishable food, helping exporters and creating insurance against future food shortages.
Very low interest rates mean money is practically free to borrow at the moment, and long term bonds could be issued to tackle this that would place little pressure on the creditor or debtor.
The next question then is who would be motivated to do it? Perhaps China. After all, China has, over the last 20 years, invested vast sums in Africa alone, much of it on beefing up infrastructure. You can read about the Delivering Pandemic Resilience white paper here.
|Pandemic and uncertainty but no time to panic||15/06/2020|
The latest figures from the Office of National Statistics showed the damage to the economy wrought by the pandemic. GDP fell by 20.4% in April, following a fall of 5.8% in March.
This is an unprecedented slump, in more ways than one. First, it’s a much steeper decline than even during the recession. But it stands apart also because, while it’s a big drop, it doesn’t reflect an underlying trend. It’s the very definition of a one-off event. The only uncertainty is we don’t know when the ‘event’ will end, or whether it will ebb and flow or disappear as abruptly as it arrived.
But, if you look a little below the surface, you can see the economy moving ahead at pace, particularly in the logistics sector.
Recent weeks have seen the completion of major warehouses for AO.com, Europa Warehouse and more. The 715,000 sq ft Europa facility in Corby, in particular, looks a belter, with three mezzanine floors and VNA racking to 18 metres.
It is to the great credit of those working on these projects that they have managed to safely power on despite the pandemic. It shows how flexible and productive we can be in the face of this challenge.
Therefore, I wouldn’t get too carried away by the ONS figures.
In a similar vein, I am not too encouraged by the drop in carbon emissions and pollution over the last few months. Obviously this does not mean we have suddenly turned a corner and become more green. Yes, maybe we will appreciate the cleaner air and change our attitudes but in the short term, it is obvious that as the economy returns to normal, as it must, so will pollution and emission levels return to the higher levels we saw before the pandemic.
|No shortage of ingenuity||25/05/2020|
At the time of writing we are entering a new phase of the pandemic. The Government is not exactly rushing people back to work but is certainly trying to get some sectors such as manufacturing and construction moving again in a meaningful way.
Getting back to work should help arrest the economy’s freefall and will hopefully pave the way for a broader relaxation of the lockdown, with retail to come perhaps in the summer, and the possibility of schools re-opening before the end of the term. But it is a fragile situation and we don’t have a lot of data to base decisions on. We have a fair grasp of the number of deaths, but crucially we don’t know how many people have been infected, because testing has been very limited.
Therefore we can only really guess at how infectious or deadly the coronavirus is. As I said, we are moving into a new phase, but daily death tolls will be watched closely and the need to frequently make transitions from phase to phase could become a key part of this, We need to be prepared to tighten the lockdown as well as further loosen restrictions, according to the reality we are presented with.
One thing is for sure, the logistics sector has responded with speed and flexibility to the emergency, which we dealt with in the last issue. In this issue, I’d like to highlight the suppliers that have adapted their solutions quickly and intelligently to deal with the unprecedented dangers logistics businesses now face.
BS Handling is a systems integrator typically associated with automated warehousing, but it has very quickly developed a system for cleaning and sanitising premises, cutting down the risk of transmitting infections.
Another fast mover is ASG Services, which has quickly rolled out a range of robust safety signage and floormarking solutions to help you adapt to the pandemic (Page 57).
COVID-19 social distancing solutions of a different type are being developed by CopriSystems. The bespoke structures manufacturer is quickly developing tunnels and walkway covers, complete with electronic doors, to help companies manage people entering and exiting a building while maintaining efficient operations within social distancing constraints. The structures can be used for safe queuing, social distancing, additional storage and logistics space as well as testing stations and decontamination zones.
Automation & robotics
We have seen a long trend towards greater automation and robotics in logistics, and the pandemic has only increased this trend. It was very interesting to hear consultancy BearingPoint say warehouses that invested early in automation have adapted best to the crisis. And obviously with shops closing, the online market has become even more important still. It’s hard to say what the new normal will be, partly because we don’t know if the path out of this criss will be swift and abrupt, or if it will be prolonged and bumpy.
But for sure, if you are a retailer and you are not investing in online, and probably in automation too, then you’re just playing dice with your future. We have a feature on Automation & Robotics in this issue. I was delighted to speak to Crystal Parrott, VP of Dematic’s Robotics Centre of Excellence, one of the technology leaders in the field. It provided a fascinating snapshot into the use of picking robotics in logistics, with insight into the fast developing world of micro-fulfillment, the limits of grippers and much else.
We’ve also noted an increasing trend towards the use of AMRs, or mobile robots, in the warehouse. This was pioneered by Kiva Systems (bought and widely deployed by Amazon) and the tech’s IP has now opened up considerably. We are seeing a lot of manufacturers and they have been busy signing up UK partners in a bid to crack the local market.
Simon Duddy is an experienced B2B editor and has worked across a range of titles including Handling & Storage Solutions, Heating & Ventilating News and Arabian Computer News.