Flexible capacity need

One of the biggest challenges to providing a cost effective last-mile distribution service is securing enough reliable vehicle capacity to meet peak demand and having the flexibility to reduce capacity during periods of lower demand.

However, Stephen Basey-Fisher, MD of Century Logistics, which operates more than 400,000ft2 of warehouse capacity in East Anglia, says the same challenge is faced when securing warehousing capacity.

"While home distribution is a key concern of retailers, they also face the challenge of securing adequate warehouse capacity to store enough products in the run up to periods of high demand," he says. "If retailers decide to operate their own storage operations, they can be left paying for a warehouse that is only half full, or they can run out of space to store product, resulting in lost sales."