No more cheap money

Instead it has determined upon a policy of Quantitative Tightening designed to reign in the excess investment that has been driving a bubble in most asset classes from tech, to stocks, to property. Let’s see if the bubble deflates or bursts.

Certainly when you look at some of the VC-backed tech firms, including those in logistics, you see trends somewhat reminiscent of the Dotcom bubble in the early 2000s.

Q-commerce is a good example of this. Firms such as Gopuff, Gorillas and Getir grew rapidly during the pandemic, as demand for their services soared and VC money poured into their coffers to drive the roll-out of the tech, the marketing and the micro-warehouses. But the VC money is drying up and investors are no longer looking for market share - they want profit and they want it now. Gopuff is said to have laid off 10% of its staff and shut many of its dark store warehouses, as has Europe-based Gorillas. 

US provider of micro-fulfillment tech Fabric has also announced it will lay off 40% of its workforce.

In the light if this, it is perhaps impressive that UK-based warehouse robots and data intelligence company Bots and Us has secured funding to develop its platform. It has not been active for very long in logistics but has racked up a good number of blue chip clients.

We run an interview with Bots and Us on Page 28, so check it out for more. 

Stepping away from investment markets, and looking at the wider economy, this relative lack of money [there will not be an absolute lack of funding, but the glut is over] should also lead to dis-inflation, in that prices while probably not generally falling, will at least increase at a much slower rate.

It will also put less emphasis on capital and more emphasis on people. After all, if cash injections aren’t going to drive profits, then employees will do it through work and innovation.

This reminds us that demographics is destiny, and if the UK logistics sector is to thrive, it must find ways to make the most of human resources. We were delighted to have Marisa Baker speaking at our recent Tomorrow’s Warehouse Event. Drawing on her own early life in foster care as well helping a homeless man into successful warehouse work, Marisa encouraged us to look past our biases, and give people a chance. For more on the Tomorrow’s Warehouse Event, go to Page 18.

Looking for the next generation of logistics leaders will also be a key theme at the upcoming IMHX, which takes place from 6-8 September, at the NEC. You can read about how the organiser will make a special presentation to celebrate 30 leaders under 30, and much else, in our Preview, which starts on Page 35.