A busy year in logistics

Logistics is a little bit like the electricity supply – it gets taken completely for granted until there’s a power outage. Fortunately, over the last year, which happened to be my first in the role of CEO of UKWA though my 30th in the sector, I had the clearest view of the wealth of skills, innovation and endeavor in the logistics sector staving off the risk of serious outages disrupting the everyday lives of everybody. But the task gets tougher as the pace of change increases. The onus is on our sector to continue to develop and to continue to meet the challenges of current trends – not only from within the logistics arena but all that is going on in the wider world.

For example, innovation in technology and advancement in transport are shrinking the world, at the same time we are witnessing significant demographic shifts such as population growth and longevity against a background of increasing shortages of basic commodities as affluence spreads though developing economies – all feeding an insatiable consumer desire that wants more and wants it now.

These are some of the mega trends impacting on the logistics industry in the coming years. They may well pose challenges and risks but they also offer opportunity for a wide spectrum of supply chain practitioners. Many of these issues were examined at the IFWLA Convention 2015, which was opened by HRH The Princess Royal. You can find out more about the proceedings on www.ukwa.org.uk

One of the key themes at the conference was the evolution of twenty-first-century supply chains into worldwide inter-connected supply-and-demand networks, comprising vastly more complex operations. As the facilitators of global trade, the logistics and infrastructure providers need to respond to these profound inter-dependencies and exposure to greater volatility in our uncertain world.

Meeting the needs of a retail revolution is among the biggest challenges. The gap between production and consumption is shrinking. Technology, meanwhile, is increasing the demands and expectations of the consumer. With populations increasing in urban areas and the exponential growth of convenience stores, distribution networks in the grocery sector are gearing up to feed the nation with smaller picks for little and often deliveries.

The key to success will be getting the final mile part of the solution not just right but sustainable when it comes to designing networks to cope with the demands of local fulfillment.

Grocery retailers are configuring efulfilment and convenience networks and, along with parcel carriers and 3PLs, increasingly need operations centred around urban conurbations – where more people are living and working – as the pressure grows for speedier fulfilment.

It’s fair to say that the UK is leading the way in international logistics for ecommerce, where online shoppers have been weaned on excellent service when it comes to fulfillment of their orders and handling returns – much of it for free. This is a major challenge for 3PLs operating low margin businesses. We need to consider seriously the sustainability of free / next day / same day delivery and no quibble returns.

UKWA members, however, will continue to demonstrate their agility in providing cost effective solutions to the challenges of fulfillment and returns.

But we will require Infrastructure, which in many areas is already stressed and subject to environmental and traffic regulation plans. A balanced approach that delivers more distribution space with minimal planning constraints is called for.

There is an increasing demand for all types of logistics property. Investment activity in the sector is high yet demand – whether for large, million square feet sites or smaller facilities to support the trends of urban distribution and little and often – is outstripping supply.

Government should recognise that warehouses, distribution centres and fulfillment centres play a vital role in supporting communities. They should also bear in mind that they are key employment hubs for local people and apprentices – providing not just jobs but an entry point for a dynamic career than can’t be matched by other employers.

This brings us to UKWA making career development and training for our industry a top priority. As Lord Digby Jones said at the UKWA Awards Lunch in July, we need to train if we are to boost our productivity.

UKWA members are only too aware of the challenge involved in meeting the burgeoning demands of customers balanced against achieving operating efficiency in a highly competitive sector. Technology investment is a critical competitive weapon but one that also demands people with the appropriate skills to maximise its advantages – skills that do not always come easily to an ageing workforce.

Our industry has a greater requirement for multi-skilled workers. Communication and customer service are other key skills high up on the checklist, as operators become increasingly customer facing. Bringing people with these skills into our industry will take a combination of attracting recruits, succession planning and continual development.

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Going forward into 2016, UKWA will play a crucial role in improving the image of the sector and promoting career development opportunities. We are developing partnerships with a range of providers to meet members’ needs for training courses and qualifications at all levels.

The Association will also be addressing common logistics health and safety issues including fire prevention, loading docks and forklift trucks. We should always strive for safety in all aspects of logistics. UKWA in conjunction with Safety Pass Alliance (SPA), a leading provider of safety passport schemes, are creating a one day health & safety passport training scheme specifically for the warehousing and logistics industry.

We must also guard against potential onerous impacts of regulations that have been made without a balanced approach. We want to balance initiatives designed with positive aims but at the same time impose draconian measures that make business increasingly difficult for our members, as well as other operators in the logistics sector and retailers.

A good example of this is UKWA commissioned research launched last year to present a clear understanding of how proposed sprinkler regulations would affect warehouse operators. This report was discussed at the Health & Safety Event at the NEC last February. UKWA believes that by working together with the trade bodies as well as national and local government, workable solutions can be found.

This also goes for our members who are heavily involved in the handling, storage and distribution of excise goods. Following successful pressure and campaigning by UKWA, HM Revenue & Customs (HMRC) has reviewed the timescales taken to approve applicants to operate excise businesses and the conditions imposed on such approvals.  The review has found that the approval process has often taken too long and conditions applied were not always fit for purpose – and some cases may unjustly restrict business activity.

As we progress into 2016, we will be addressing these, and other issues, lobbying government and policy makers as the voice of the logistics industry to ensure its needs are heard, understood and addressed.

We will also be announcing a number of additional and exciting benefits that will be rolled out in the new year to UKWA members whilst broadening the scope of the Association’s appeal to the wider logistics sector.