A significant shortage of warehouse space risks further delaying Christmas stocks, which are already threatened by a growing backlog at UK container ports and a shortage of lorry drivers, businesses have warned.
Warehouse operators reported the industry was “cramping at the seams” and said companies were running “alarmingly” low in time to prepare for the busiest period of the year.
With firms competing to fill thousands of vacancies, space constraints are compounded by a severe shortage of warehouse workers.
Employees are being offered a salary hike of up to 30 per cent which is expected to be passed on to customers as margins are very tight in the logistics industry. The increment comes on top of a more than five-fold jump in the cost of shipping a container of goods from China.
Shoppers are being advised to expect longer delivery times, higher prices and fewer options.
The boom in online shopping during the pandemic has caused warehouses to fill up quickly, while businesses have responded to the chaos in global supply chains by creating stock, putting further pressure on limited space.
Industry leaders say a cumbersome planning system means they can’t build new warehouses fast enough to meet demand.
It comes as shipping firms have been gripped by gridlock this week at Felixstowe in Suffolk, the UK’s largest container port, where a lack of lorry drivers has led to piling up of goods in warehouses.
“The ports are capable of moving boxes and loading and unloading ships; The problem is moving goods in and out of the port, said Tim Morris, chief executive officer of Major Ports Group. “We have to manage the storage space very carefully. The problems start when it gets full.”
Businesses face long waits to get their goods out of ports and are being forced to divert goods to Rotterdam and other European logistics hubs. Small ships are hired to carry goods in the UK.
“We have a backup of stock for weeks,” said Phil Chesworth, managing director of industrial equipment supplier Midland Pallet Trucks. “The containers that arrived in this week will no longer be delivered till November. it’s terrible.”
Containers that cost £3,000 before the pandemic now cost £20,000. “To us, goods in a container may only be worth £36,000,” said Mr Chesworth.
Some of Midland’s goods are stuck in China as shipping firms are prioritizing a lighter-weight cargo that is more profitable to ship, Mr Chesworth said. “We’re at the back of the queue.” The problem of storage has added to the rising bill.
“We are paying more than the minimum wage, but we cannot recruit employees. When the containers are rolled out we are struggling to get the workers off the boxes and keep the stock on the shelves.
“The situation will not improve this side of Christmas, certainly not. Entry-level warehouse roles would typically be filled in September to cover the peak period of two weeks, so the industry could be dangerously out of time. Used to be.
Gary Whittle of warehouse operator Meechers Global said extreme volatility in the flow of goods into the UK is the biggest source of pressure.
Goods that used to remain in the merchants’ warehouses for a day before moving are now abandoned for a week or more due to staff shortages, leading to further space closures.
Mr Whittle said storage at ports is “cracking at the seams”. “We’re just about to compete but it’s really close to breaking down.”
“Many people are doing so much to help this sector. I hope that’s enough. It’s as hard as I’ve ever seen it and I’ve been in the industry for 40 years.”
He added: “It’s going to be a tough three to six months before things settle down. It’s going to be really, really tough for everyone in our region.”
UK Warehousing Association chief executive Claire Bott said the industry has a more severe labor shortage than the haulage sector, which requires an additional 100,000 lorry drivers.
According to UKWA figures, more than a third of forklift truck drivers in the UK are EU citizens, compared to 15 per cent of lorry drivers.
The post-Brexit migration of skilled workers has been accompanied by an increase in demand for warehouse workers.
“The activity that used to be in a store is now happening in a warehouse,” said Ms. Bott.
“A picker preparing goods for e-commerce has to select individual goods for each order, print address labels, pack them and divide them based on which courier delivering them.
“It demands more space and more labor, which we just haven’t got in the UK.”
Large retailers, including Amazon, have attracted employees from other companies by offering pay increases and bonuses. Ms Bott said the situation amounted to “robbing Peter to pay Paul” because it does not solve an economy-wide shortage of workers.
Job vacancies hit a record high of 1.1 million between July and September, while the unemployment rate remained at a low of 4.5 percent, according to official data released this week.
UKWA calls upon the Government to honor its previous promises of promoting logistics as a career for youth.
“Storage doesn’t sound sexy. It conjures up images of old men in brown coats and it’s really not like that,” Ms. Bott said.
The trade body also wants ministers to update planning rules so that warehouse space in optimal locations can be created faster.
“Logistics companies have sophisticated…
Credit: www.independent.co.uk /