Get Your Warehouse In Order

Happy New Year, everyone. We hope you had an exciting but restful festive season and are eager to get going for what will prove to be an eventful and challenging year ahead. Of course, we realise it’ll be less hectic at the moment after one of the busiest seasons for the logistics sector. But with the £20bn barrier breached for online sales in late 2019, this is not a time to rest on our laurels.

Based on some illuminating business indicators, 2020 looks set to be even more demanding. As the growth in online sales continues unabated, it seems like the delivery sector will have yet another year of increased growth. It’s also evident changes to the supply chain will be needed to accommodate the economic reorganisation that is underway.

Space To Grow.

Data compiled by real estate specialist Colliers International shows that demand for warehousing space is accelerating. Collier’s research found that by Q3 2019, over 55% of large warehousing space was for use by the delivery sector. This space is being redesigned to meet the increasing demand for fast deliveries from online sales that are now expected by UK online consumers. Market predictions expect this trend to quicken during 2020. As Collier’s head of industrial and logistics, Len Rosso commented:

“Online customers have become accustomed to fast shipping, and more sophisticated parcel courier services offering last-mile, same day and next day delivery, forcing retailers and parcel couriers to invest significantly in future-proofing their supply chain operations.”

The Brexit Effect

This research runs counter to the prevailing view that the demand for warehousing in 2019 was driven by firms stockpiling goods and raw materials to mitigate the effects of Brexit.

The data shows much of the growth came from retailers and third-party logistics (3PL) firms who are bolstering their business operations to cope with ever-increasing volumes of online sales. Additional research from Savills showed in late 2019 that the share of warehousing take-up from retailers rose from 7% - 11%. Interestingly, demand from the eCommerce sector fell from 27% - 17%.

The most revealing change here is the record 31% share taken by the 3PL sector showing the operational changes that are happening in the relationships between retailers, delivery firms and consumers.

As Savills head of industrial & logistics, Richard Sullivan said: “We believe that Brexit has had little impact thus far on occupier demand and activity and there are instead far more important factors driving the market, such as a structural change in the retail sector.”

What is clear is the massive opportunity for the warehousing sector. Over the coming years, premium pricing and improved margins will be available for those firms with available capacity or the funds to invest in additional facilities.

Demand The Best

It follows that increased online sales and the need for specialist warehousing will drive demand for well-designed vans and trucks to service the extra deliveries. That’s why the team at Truckcraft are looking forward to another busy year supplying and developing our market-leading range of custom-built vehicles all designed with the logistics sector firmly in mind.

Buckle up everyone; it’s going to be a busy 2020!

If your delivery firm is predicting a busy year ahead then you’ll need best in class vehicles to meet your customer demand. If so, please contact the Truckcraft Bodies sales team on 0161 304 9404. Alternatively, email glen.pinder@truckcraftbodies.co.uk or emma.jane@truckcraftbodies.co.uk.

Published: Jan 15