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Logistics industry bodies warn warehouses reaching capacity

20 April 2020

Companies are still receiving stock but with demand receding due to coronavirus and its associated economic lockdown, warehouse space is filling up.

Shane Brennan, CEO, Cold Chain Federation outlined: “With frozen and chilled food products still coming into store at a high rate but demand all but gone for many usual customers such as food service, schools and airlines, cold stores are now starting to fill up. We predict that they will be full across the UK, with no new space available, in about two weeks’ time.

“Cold chain businesses are doing their best to plan ahead, at the same time as battling to meet wildly changing requirements from week to week, but forward planning is very tough when total uncertainty means that feasibly life could pretty much return to normal by September, but equally restrictions could stay in place at some level until Spring or even Summer 2021.”

UKWA CEO Peter Ward added businesses in the sector need to understand the likely phasing for lifting of restrictions in order to plan ahead.

“Further to the news on Thursday 16th April that the COVID-19 restrictions are to be extended by at least a further three weeks, UKWA calls on the government for more detail on when it might ease restrictions on certain sectors of the economy.

“While fully understanding the reluctance of the government to speculate on the exact timing for the lifting of lockdown, businesses need to understand the phasing that is likely to happen when the time comes. Facing full capacity because of an inability to move stock, and compounded by unpaid customer bills, UKWA members are looking into the abyss of no information from government.

“With a planning horizon and some intelligent forecasting aligned to government thinking, warehouse operators and logistics companies would stand a better chance of survival, knowing what to plan for and how soon after the lifting of lockdown manufacturing and retail sectors might be allowed to resume working.”

Phased approach

Some EU countries are starting to take steps towards de-restrictions but the Cold Chain Federation said it was not expecting big decisions on strategy in the UK until the PM is back to work. 

It added: “The likelihood is a phased approach across the board, shifting from general movement restrictions to targeted ones (for age groups / regions) alongside a phased return of economic activity and phased permitting of gatherings of people and cross-border movement de-restrictions – all with social distancing protocols maintained throughout.

“All this means that life as normal could be with us by September 2020, or more likely not before at Spring / Summer 2021. Like all sectors, this makes planning ahead very tough for cold chain businesses.”

The Cold Chain Federation has reported temperature controlled haulage has seen a huge drop in volume, estimated to be 40-60% across the sector. Many vehicles are parked up and drivers have been furloughed.