In its latest half-year results released earlier this week, Ocado’s co-founder and CEO, Tim Steiner, said that in the “last six months the centre of gravity at Ocado Group has shifted….we are beginning to apply our technology skills and expertise to other related activities which we expect to be of benefit to our Solutions partners as well as to other Ocado Group stakeholders.”

The company now provides e-commerce logistics platforms for a string of grocery retailers in North America and Europe as well as its own UK operations. The latest was an announcement of a new fulfilment centre for the Canadian retailer Sobeys.

Thomas Cullen of Transport Intelligence explains: “Essentially what Ocado are trying to do is to create a series of internet retail brands, such as its new joint venture with Marks & Spencer, which it supports through its automation and artificial intelligence technology. Of course, most of its customers are independent retailers, notably Kroger in the US. However, the underlying logic appears to be that Ocado’s technology is so powerful that even its retail customers are dependent on it to achieve their internet retail objectives.

“Yet despite Mr Steiner’s understandable ambition, it remains the case that in revenue terms Ocado is still dominated by its own-brand grocery retailing business. For the first half of 2019, the retailing business had a revenue of £811.5m whilst the ‘Solutions’ technology operation saw only £70.8m. The ‘Solutions’ business is still loss making and will require continuing capital investment.”

Ocado is the leading technology rival to Amazon for the provision of e-commerce technology. Its growth has been impressive and it has an impressive list of customers. Tim Steiner says that it is discussing more opportunities with retailers around the world but he says he needs to ‘select and prioritise the most attractive of these opportunities’. 

Cullen adds: “However, it still has not quite achieved the scale that it needs to establish itself as major global player in e-retail technology. Despite the contract with Kroger, Ocado is still heavily exposed to the UK so it will be interesting to see who the new customers for its technology will be and whether they can continue the momentum that Ocado needs to become a leader in logistics technology at the global level.”

Despite the growing uncertainty around Brexit, the research shows occupiers were active during 2018; although overall take-up was 4% down on a five-year average, it was only slightly below 2017’s total. 

The logistics segment had UK take-up in units above 100,000 sq ft falling just short of 2016’s record high. It was, however, a different picture at the smaller end of the market. Despite an increase in supply, mid box (50,000 sq ft to 99,999 sq ft) take-up was the worst in nine years after a record year in 2017. The result raises questions about whether the new supply is meeting occupier needs on location and specification.

The report by LSH expects 11.7 million sq ft of speculative development to come forward in 2019, which will go some way towards restoring choice at the larger end of the market. However, the current boom in speculative development is heavily weighted to the logistics sector.

The development response at the smaller end of the market has remained elusive in this cycle, and there is a danger that the critical lack of supply of quality medium-sized and small properties will continue, despite robust levels of demand.

Strong overall results also hide a striking difference in performance between UK regions. Take-up in East Midlands hit a record 14.6 million sq ft, and big box logistics take-up increased 93%. In contrast, take-up in the West Midlands was low.

The threat of a no-deal Brexit has resulted in a cautious start to 2019, but if this is avoided, demand could be released with a rebound in activity. Logistics occupiers are likely to take more space as eCommerce continues to grow, though as the sector is heavily reliant on an EU workforce, it could be affected by a growing labour shortage over the coming years.

James Polson, National Head of Industrial and Logistics at LSH, commented: “The hive of activity across the industrial and logistics sector continues unabated. The driver remains the UK’s evolving eCommerce sector, with investors and occupiers alike clamouring for stock.”

A report published by Zenzic and Ordnance Survey sets out what the global standards should be for the high-definition mapping necessary for the safe deployment of self-driving vehicles.

The ‘Geodata report - analysis and recommendations for self-driving vehicle testing’ calls for the creation of common data standards that promote collaboration and improve confidence in mapping data for self-driving vehicles.

The report goes into depth on a number of issues including:

• The level of detail required for self-driving vehicle mapping - OS and Zenzic have determined that self-driving vehicles will require maps with resolution better than 5cm to ensure vehicles can operate in complex environments. Maps will also need to include information on curbs, street-level features like lamp-posts, pedestrian crossings and road markings. Real-time updates to maps will also be crucial to let self-driving cars‘see’ around corners for temporary objects in the road like skips or roadworks.

• Why self-driving vehicles require a new generation of live maps - Self-driving cars use a range of sensors to ‘see’ the world around them. However, interpreting that information in real-time requires a lot of processing power. With high-definition maps which are updated in real-time, a self-driving vehicle is able to reference the position of other road users against what it already knows to be there. It also provides a back-up in situations where its sensors are less effective. Adverse weather conditions like heavy-rain or sun reflecting off a wet-road can make relying on sensor data alone difficult.

• What standards will be necessary globally for self-driving mapping to be available and useful - Currently there is no single source of high definition mapping data, each self-driving company is having to develop its own from the ground up. Ordnance Survey suggests a neutrally hosted platform for mapping data would increase the confidence in the data as it comes from multiple sources and would help different self-driving vehicles co-exist on the same piece of road. For this to work standards for how data is collected and shared will need to be implemented globally.

The research is being carried out in partnership with Zenzic, which was created by the UK Government and industry to coordinate a national platform for testing and developing connected and self-driving vehicles in the UK and is channelling £200 million in investment into the British self-driving industry.

Zenzic CEO Daniel Ruiz said: “The UK’s goal is to be able to benefit from self-driving vehicles on our roads at scale by 2030, a target that requires the development of technologies and tools which do not fully exist today. Our report with Ordnance Survey is another stake in the ground for the UK as a leader in the self-driving revolution and shows how the UK is building on its expertise in areas like mapping to drive the world forward.”

You can read the full report here at https://zenzic.io/insights/report/geodata-report

Operations leaders know what they’re spending, and they likely know that they need to spend less. Worldwide, warehousing operations cost companies about €300 billion each year, and that amount is growing as global supply chains and the prevalence of eCommerce lead to greater complexity, says the firm.

But if you ask most operations leaders what their lowest potential costs could be for a given facility, they simply do not know the answer.

Why not? Most companies don’t have a clear methodology for determining those costs. They may have put out a tender for outsourced services through a third-party logistics (3PL) provider. That’s a good way to find out what someone will charge you, but not what the underlying activities truly cost. And without knowing what costs should be for a specific warehouse, any improvement initiative to reduce spending and increase efficiency is bound to fall short. Operations managers have little idea of what kind of gains they can generate—or where.

McKinsey asserts its research carried out over the past decade, including detailed analyses of more than 1,000 warehouses in key industries and geographies worldwide, shows that many companies’ costs are dramatically higher than they should be. We also found that companies can accurately size this gap only by assessing warehouse costs through a bottom-up analysis that determines the ideal cost structure for a given facility.

The company says: “In our experience, there are usually two ways for companies to assess warehouse spend for a given process area. The first is a top-down analysis that relies on industry benchmarks. However, benchmarks can be blunt instruments. They are often available only at a high level, such as total warehouse cost as a percentage of cost of goods sold or per case, compared with last year’s budgets. Furthermore, benchmarks fail to factor in unique service offerings. Different product portfolios, order patterns, delivery standards, supply-chain requirements, and other attributes can all affect warehousing costs significantly, even for companies in the same industry.

“The second—and far more precise—way to analyse warehouse costs is a bottom-up, “cleansheet” calculation. A cleansheet is a mathematical model that determines the true costs for a given warehouse, in terms of space, labor, and equipment. The critical advantage of this approach is that it lets companies drill down into the three biggest cost drivers of a warehouse and see where a company is paying more than it should (Exhibit 1). The goal is to identify the lowest possible cost of each component, rather than the actual cost the company is now paying. By isolating components in that way, companies can tackle the biggest discrepancies and problem areas.”

The first step is to look at processes, which means taking a close look at labour. The cleansheet analysis looks at actual warehouse activity levels and volumes, and determines the average processing time—i.e., how much time should be spent on each activity. Companies can then convert that result into a cost, using a factor cost base with country-specific average labor rates for given types of work.

Next, the cleansheet factors in space and equipment. These aspects are crucial given that processing times in a warehouse are typically linked to walking or driving within storage aisles, and that some equipment dictates a certain aisle width. Using both inputs, a cleansheet computes the warehouse space needed to handle annual volume at specific service levels. The analysis also includes the running costs, or opex, and investments, or capex, for selected material-handling equipment and racking configurations.

Once companies have a true idea of their reasonable costs for a facility, they can compare those data to real-world warehouse costs for their industry and geographic market. The areas with the biggest gaps are the most immediate priorities for improvement. Onsite warehouse walkthroughs and assessments of the main warehouse processes can validate the cleansheet calculation’s assumptions and areas it has identified for improvement.

The improvements themselves run the gamut from optimising layouts to redesigning processes, improving performance management, and potentially installing automation systems. Notably, automation can lead to significant improvements, but it is not always the best answer. Implementation costs can be high, and some systems may not be flexible enough to adapt to changing market conditions.

Once companies understand their biggest problem areas, the next step could be a digital warehouse design: creating a “digital twin” of any existing warehouse facility to model the impact of changes to the layout and workflow, before moving physical assets, making investments or changing warehouse 3PL providers. Together, these two tools—cleansheet analysis and digital warehouse design—provide substantial new opportunities to capture value in global warehousing.

The Frigo DC by Dometic leverages the company’s cooling technology for a ‘totally electronic’ cooling system for temperature-controlled transportation.

The solution is said to be less energy intensive than competing technology. 

The Frigo DC has a powerful electric compressor without mechanical construction. This technology is said to offer the only way to install cooling systems in electric cars.

It also features a design to combine compressor and condenser into a single unit. It is compact, lightweight and does not require a roof-mounted structure.

Dometic Frigo DC is designed for the refrigeration of smaller commercial vehicles with tight engine compartments.

When the supply voltage is low, the performance of the compressor is automatically reduced to keep the cooling system going without exhausting the vehicle’s battery. It both saves energy and prolongs service life.

The reseller partnership between Locus Robotics and JDA Software is designed to facilitate and accelerate adoption of the warehouse technology offered by both companies, with easier, faster deployments and integrations.

“JDA has a proven track record of identifying and utilising the industry’s most advanced technology solutions to enable leading retail and third-party logistics companies to tackle challenges in their supply chain head-on,” said Rick Faulk, CEO of Locus Robotics. “We are excited to be working together and look forward to leveraging JDA’s powerful platform to fast-track new customer onboarding, while also driving greater operational efficiency, productivity, and accuracy for our customers.”

Through the partnership, JDA will promote and sell Locus’s multi-robot solution as a reseller and build a more seamless integration over time, which will allow for faster implementation and deployments. 

As a Locus Robotics reseller, JDA will ultimately provide a one-stop subscription service to Locus Robotics’ solutions, providing scale to their customers in automated and semiautonomous environments, all with the aim of higher levels of warehouse productivity.

“Locus Robotics is an excellent fit for JDA, and we’re looking forward to working with them as a reseller,” said Alex Price, GVP Global Alliances, Channel and Technology Ecosystem Strategy JDA. “We are committed to bringing the latest productivity improvement and problem-solving solutions to our customers worldwide with standard product adapters. Locus’s innovative multi-bot solution represents the future of warehousing, and it has already proven itself in dozens of commercial deployments, including several JDA deployments. Through this partnership, we will ensure a faster time-to-value for our customers.”

Main contractor GRAHAM civils and Gill Civil Engineering supporting with the concrete project, carried out the work.

When operational in Spring 2020, Tilbury2 will be the UK’s largest unaccompanied freight ferry port, the country’s biggest construction processing hub and the creation of a new significantly larger rail head which can accommodate the longest freight trains of 775m.

Tilbury2 will act as a satellite of the main port and will comprise a:

• roll on/roll off ferry terminal for importing and exporting containers and trailers
• facility for importing, processing, manufacturing and distributing construction materials
• storage area for a variety of goods, including exported and imported cars
• new national strategic rail and road connection into the site.

However, the main crux of the issue lies with the fact that a large proportion of logistics companies are busy at the same time of year, typically August – December, and so, are competing for the same staff.

This issue is faced by companies both in densely populated areas and those isolated in areas like the Fens in Cambridgeshire. We have clients based in locations like Rugby that hire heavily throughout the year but, within a mile radius, there are another 20 warehouses hiring for the same job roles. On the flip side, we have clients with no competition on the doorstep, that aside from the core permanent team, only employ staff temporarily and will suddenly need 250 people in the final 12 – 15 weeks of the year. 

Hiring in these conditions is, of course, difficult but can be manageable depending on the company’s approach to recruitment and how it treats its staff. There are four points that companies should consider in order to attract temporary workers during busy seasonal periods and hire and retain skilled candidates in the core permanent team. 

• An inclusive introduction 

Change the collective and make sure you create an inclusive environment from the very start; a new team members induction is so important to a company. One of our clients has this down to a tee. New starters are given a site tour and meet the shift management and personnel before they accept the job, which gives them the opportunity to decide whether it is the right role for them; minimising attrition on both sides. 

Starting a new job can be a nerve-wracking experience, no matter what your age. One of our roles as an agency is to try and take that anxiety away from the candidates. We make sure that we are present on site when the temporary candidates start to make the necessary introductions so they are involved in team meetings on day one. 

• Create a positive culture 

Smart logistics companies understand that by creating a positive working environment for staff they are more likely to retain them. If candidates or employees feel cared for and valued, there is less risk that they will move elsewhere. The best organisations monitor employee motivation by inviting regular feedback and/or implementing family friendly policies like flexible working or additional annual leave. 

• Provide guidance and training 

Employers should take the time to show new workers the career opportunities available for them, dispelling the myth that a warehouse position is a dead-end job. Make the time to show your employees the opportunities of the rapidly expanding industry; offering hands-on experience and/or formal training needed to take advantage of a warehouse career is a valuable step towards retaining your staff. 

• The bigger picture 

It’s imperative that employees realise how important they are to an organisation and that there are opportunities for future growth, job satisfaction and long-term employment. Employees who realise that the company’s success is directly tied to their own personal success are far more likely to be committed, hardworking and good ambassadors for your services to your customers. 

Companies should demonstrate that even lower level employees can rise up through the ranks if they put in the hard work required. To do this, employers need to work closely with each employee to understand their long-term goals and develop a personal growth plan that benefits both the company and employee. Such win-win scenarios produce happy and extremely loyal employees. 

While there will always be obstacles to overcome when recruiting or retaining staff, there are simple solutions that companies can put in place to ensure that the two Rs aren’t the most feared words in the industry, and these four tips set a good foundation for success. 

Aaron Bowes, director, Recruit Mint

Linkx specialises in automated packaging machinery ranging from single-order dispatch systems to fully integrated automation. Its BoxSizer technology platform can right-size multiple sizes of cartons on the same machine without stopping for changeovers.

BoxSizer complements WestRock’s existing automated packaging systems portfolio, including its Box on Demand solution. Where Box on Demand creates custom-sized boxes, BoxSizer reduces the height dimension of multiple-sized boxes with no changeover to reduce empty space, void fill, materials, labor and shipping costs. By removing excess packaging material, BoxSizer and WestRock’s other right-size technology solutions help customers reduce their shipping, warehousing and environmental costs.

“We’re excited to add Linkx and its BoxSizer technology to our automated packaging systems portfolio,” said Jeff Chalovich, WestRock’s chief commercial officer and president of its corrugated packaging business. “Linkx further differentiates our paper and packaging machinery offerings and helps us address the growing need for on-demand packaging, especially for eCommerce applications.”

The acquisition comes as the Hines Pan-European Core Fund has secured a further €141 million of new commitments, and confirms the recently announced expansion of the Fund’s investment scope to include urban logistics and residential.

The purpose-built eCommerce distribution centre was completed in 2010 and is fully let to retailer John Lewis Partnership on an 11.5-year lease. Located within the Innova Business Park, the site is one and a half miles from Junction 25 of London’s M25 orbital motorway. The site was acquired in an off-market transaction for an undisclosed price.

Greg Cooper, Hines UK director of industrial and logistics, said: “John Lewis Plc is a high-quality tenant and demand for well-specified logistics facilities within easy reach of central London continues to grow rapidly against an increasingly supply restricted backdrop. We are increasingly focused on opportunities with similar characteristics in this dynamic and fast-moving sector.”

Last month Sports Direct sold its Shirebrook HQ in a £120m deal with a Malaysian pension fund. Sports Direct will take a 15-year lease and continue to operate from the site.

Kevin Mofid, director of research, Savills, told the audience at the recent Warehouse Technology Group event in Manchester: “Logsitics buildings are being targeted for acquisition by pensions funds at the moment. It is an asset class that it seen as a more attractive option tp many than office buildings or shopping centres. Operators need to ask themselves if the time is right for sale and lease back.”