Truck and Track Summer 2023

Truck and Track Summer 2023 36 Many, perhaps most, manufacturers and retailers experience pronounced peaks in their requirements for warehousing and distribution centre space. This may be part of the normal business cycle – ramping up stocks before a seasonal sales peak such as Christmas or Easter, or in advance of launching a new product or range. It may be a strategic response to unusual conditions – stockpiling goods and materials ahead of an anticipated price rise, for example. Or the need may come out of a clear blue sky: an unexpected market change leaving an overhang of unsold stock, perhaps, or supply chain disruption causing orders from the Far East all to arrive on one vessel rather than spread over several months. Unexpected increases in stock levels may drive a frantic search for emergency temporary accommodation. But there is an argument to be made that the use of temporary or short-term warehousing should be part of the firm’s normal tactical and indeed strategic response to ever-changing conditions. It can very rarely make much sense for an organisation to scale its permanent warehouse space provision around the highest peaks of demand. Quite apart from the significant fixed costs of owning or leasing, equipping and servicing, space only to have it operate for much of the year with relatively low productivity, the days when the warehouse labour force could readily be ramped up and down are long gone. And in these days of extreme uncertainty – supply and shipping disruptions, the continuing aftermath of Covid, high inflation threatening recession, the war – it is a brave or organisation that commits resources for the typical multi-year leasing term. The alternative is for companies to embrace temporary or short-term space as part of their considered, long-term warehousing and distribution strategy. But is that realistic? Surely all available space is being snapped up by the on-line retailers? That isn’t actually the case. Colliers, the agents, report that, in 2022, the shape of the warehousing market has largely reverted Short-term space is critical to a successful warehouse strategy By Steve Purvis, Managing Director at Bis Henderson Space MANAGED WAREHOUSE SOLUTIONS