It’s time UK government prioritised logistics

SPONSORED BY Pro­l­o­gis

Every minute, of every hour, of every day, prod­ucts are being picked and packed in ware­hous­es across the UK ready for deliv­ery to a house in your neigh­bour­hood, to your home or to your place of work. A fine-tuned, just-in-time logis­tics indus­try thrives in the UK, tur­bocharged by the coro­n­avirus out­break and an econ­o­my dri­ven by con­sump­tion. But with the British gov­ern­ment poised to pri­ori­tise hous­ing over logis­tics, there’s cause for con­cern in urban areas.

“The pan­dem­ic saw sup­ply chains flex their mus­cles. For some it was like try­ing to deliv­er Christ­mas every day. The sec­tor expe­ri­enced a decade of growth in a few months. The lack of toi­let rolls or pas­ta on shelves high­light­ed how vital logis­tics is to keep­ing the coun­try run­ning. Deliv­ery dri­vers are now con­sid­ered key work­ers,” says Robin Wood­bridge, head of cap­i­tal deploy­ment in the UK for Pro­l­o­gis, the world’s largest provider of logis­tics build­ings.

“Yet sad­ly ours is the Cin­derel­la indus­try. A ris­ing star that’s shown incred­i­ble resilience, yet often over­looked by gov­ern­ment and tak­en for grant­ed by the pub­lic. This atti­tude needs to change if we’re to keep the UK econ­o­my run­ning effi­cient­ly.”

Pro­l­o­gis has £4.6 bil­lion of assets under man­age­ment in the UK, locat­ed on 22 Pro­l­o­gis parks, and more than $2 tril­lion flow­ing through its dis­tri­b­u­tion cen­tres in 19 coun­tries. Its logis­tics build­ings in the UK see the equiv­a­lent of 2.6 per cent of UK GDP flow­ing through them each year.

“Sup­ply chain logis­tics won’t thrive unless com­pa­nies have build­ings in the right places. These need to be strate­gi­cal­ly locat­ed to sup­ply goods to people’s doors quick­ly and sus­tain­ably. The cus­tomers who occu­py our build­ings don’t just sup­ply the lat­est gad­gets, but vital med­i­cines or gro­ceries to the elder­ly or those who are shield­ing. Indus­tri­al sites can­not be locat­ed many miles away from the homes they need to serve,” says Wood­bridge.

“The sector’s abil­i­ty to deliv­er goods on time will be severe­ly com­pro­mised if gov­ern­ment fails to under­stand and pri­ori­tise its needs. We’re fac­ing the great­est pres­sure on logis­tics space in liv­ing mem­o­ry.”

The UK government’s recent white paper enti­tled Plan­ning for the Future, rep­re­sents the most fun­da­men­tal change in England’s plan­ning sys­tem since 1947 yet fails to men­tion logis­tics once in all of its 84 pages. Hous­ing is men­tioned 95 times. This lack of recog­ni­tion has huge impli­ca­tions for sup­ply chains up and down the coun­try.

“To be hon­est, it’s shock­ing and I don’t think online retail­ers and logis­tics com­pa­nies have ful­ly grasped the sig­nif­i­cance of this white paper and its impli­ca­tions for the future of urban logis­tics. A lack of strate­gi­cal­ly locat­ed land on which to build facil­i­ties means com­pa­nies won’t be able to store goods close enough to where peo­ple live and work, let alone meet the demand for same-day or next-day deliv­er­ies,” says Wood­bridge.

“We under­stand the pri­or­i­ties for res­i­den­tial hous­ing, but it needs a holis­tic approach. More homes means more logis­tics ful­fil­ment, espe­cial­ly with the rate of growth in online shop­ping. They are inter­con­nect­ed. The gov­ern­ment needs to have a joined-up approach on plan­ning that includes the vital logis­tics sec­tor. Giv­en that White­hall suf­fered its own sup­ply chain issues around per­son­al pro­tec­tive equip­ment, you’d think they would be acute­ly aware of the need to pri­ori­tise logis­tics.”

Logis­tics is also one of the only sec­tors cur­rent­ly cre­at­ing local employ­ment oppor­tu­ni­ties. Hard­ly a day seems to go by when there isn’t a media head­line about anoth­er online retail or ecom­merce busi­ness recruit­ing for its logis­tics oper­a­tions. Tesco, Ice­land and Ao.com are just some of the house­hold names look­ing to boost their sup­ply chains with thou­sands of new work­ers. This is at a time when the econ­o­my is shed­ding jobs; near­ly 700,000 have been lost since lock­down began.

Indus­try does not have suf­fi­cient build­ing land in some cities, par­tic­u­lar­ly Lon­don. Com­pe­ti­tion for uses oth­er than build­ing sup­ply chain resilience is increas­ing­ly intense, but there’s not enough allo­cat­ed sites to meet exist­ing or antic­i­pat­ed demand for urban ware­hous­ing.

Yet for every extra £1 bil­lion spent by British con­sumers online, an addi­tion­al 900,000 square feet of logis­tics space is need­ed. Oth­er fig­ures astound: if you build 300,000 new homes you need 280 foot­ball pitch­es of new ware­house space to sup­port the goods and ser­vices these house­holds demand.

“If gov­ern­ment con­tin­ues to under­es­ti­mate the real val­ue of or need for logis­tics space, local peo­ple and the envi­ron­ment will suf­fer. You can­not push all your indus­tri­al ware­hous­ing out­side the M25 or beyond city green belts. We need strate­gic sites close to where demand is. They already exist in most places, but are at risk of being sold off for res­i­den­tial devel­op­ments. We need to safe­guard land use for logis­tics,” says Wood­bridge.

“There’s a cli­mate change dimen­sion to this as well. If we’re to meet our self-pro­claimed tar­get in the UK of zero net emis­sions by 2050, we need logis­tics hubs to be locat­ed close to where res­i­den­tial demand is, deploy­ing short-range elec­tric vehi­cles that are ener­gy effi­cient. It’s the only solu­tion.”

In the long-term the answer could be mul­ti-storey ware­hous­es, which are pop­u­lar in Japan, South Korea and Sin­ga­pore, where dense pop­u­la­tions and lim­it­ed land avail­abil­i­ty have made them a neces­si­ty. These come with their own issues con­cern­ing plan­ning and the sheer size and height of the ware­hous­ing need­ed.

“The current housing crisis could be a logistics crisis in the making”

Then there is Brex­it, the tran­si­tion peri­od is end­ing at the end of 2020. This could cre­ate fur­ther issues for sup­ply chains. With so much uncer­tain­ty, near-shoring is already being put in place, where com­pa­nies keep more stock in UK ware­hous­es to ensure con­ti­nu­ity of sup­ply; again this requires more space.

“Every­one wants a robust 21st-cen­tu­ry logis­tics net­work in the UK, one that’s fit for a post-COVID-19 and post-Brex­it world. Busi­ness­es need to respond to the white paper with their con­cerns before Octo­ber 29. If not, the cur­rent hous­ing cri­sis could be a logis­tics cri­sis in the mak­ing. It’s time we all took action,” Wood­bridge urges.

For more infor­ma­tion please vis­it www.prologis.co.uk

"The current housing crisis could be a logistics crisis in the making"