The UK’s warehousing sector has been plagued by a worker shortage, making headlines and causing concerns for retailers. The number of online advertisements for warehouse workers has skyrocketed by 43.2% between December 2019 and December 2022, reflecting the magnitude of the issue.
Factors such as an exodus of workers recruited during the pandemic, inflation, the monetary impact of the Ukraine-Russia war, and the rise of AI have all contributed to the unsettling state of warehousing. However, amid every crisis lies an opportunity, and for retailers preparing for the lucrative golden period, Haissam Badr, UK national freight manager for Aramex UK, asks could the evolving warehouse landscape be a hidden blessing?
Facing challenges in leasing
It seems unjust that warehousing is the latest component of the transportation and logistics puzzle to face problems. After weathering the storm of supply chain disruptions during the pandemic, there is little respite, with one crisis after another dominating the headlines.
Consequently, retailers find themselves in a comparable situation, opting to postpone lease extensions or new warehouse space agreements. This cautious strategy is understandable given the current circumstances, as most UK retailers are grappling with the same challenges. While this shift away from the usual bustling activity during seasonal events like Halloween, Black Friday, and Christmas may feel disconcerting, it also prompts us to question the effectiveness of traditional warehousing models in 2023.
The evolving nature of the warehouse
The modern-day warehouse has transcended its role as a mere storage facility for goods. It has become a service provider that caters to the multitude of activities taking place along the supply chain. From inventory counts and order picking to repacking, labelling, and price tagging, warehouses now offer a range of services that empower retailers to fulfil orders promptly and efficiently. This evolution eliminates the burdensome aspects of leasing or dealing with half-empty warehouses.
Moreover, the ability to manage diverse tasks becomes even more advantageous as retailers increasingly embrace the omnichannel model. With around a quarter of trade now originating from e-retail, close monitoring of stock levels, swift store replenishment, and rapid fulfilment are critical to ensuring customer satisfaction and loyalty.
A fresh approach to preparing for the peak season
As the golden quarter approaches, retailers may find themselves caught in a tricky situation. The uncertain economic landscape raises doubts about committing to owned warehouse space for the usual winter peak. On the other hand, consumer spending during the recent Easter period exceeded expectations, making forecasting for the rest of the year particularly challenging. Does this positive performance provide enough confidence for retailers to invest in warehouse space for the upcoming shopping season, considering the rising costs of rent, utilities, and operations?
It is a difficult decision to make, with significant consequences if done incorrectly. However, every cloud has a positive aspect. This period of uncertainty presents retailers with a unique opportunity to experiment with outsourced warehouse operations, offering them everything to gain and nothing to lose. The main cost consideration for retailers is the price of value-added warehouse services, which now extend beyond mere storage.
Modern warehouses provide retailers with a competitive edge by offering enhanced visibility through interconnected supply chain technologies that track products from the warehouse floor to the picking line and delivery vans, enabling real-time and accurate product data—an essential element for thriving in an omnichannel world.
What’s more, retailers can measure and experience the true impact of warehouse automation on supply chain efficiency, helping them fulfil orders cost-effectively – something increasingly vital as budgets tighten.
A much-needed prompt for change
While the sector struggles with recruitment, it has been compelled to reassess operations and services, benefiting retailers by providing streamlined, intelligent, and efficient processes during uncertain times. They say it is not just what you have but what you do with it, and although the retail sector may be facing uncertainty, this unsettling feeling could serve as the catalyst for a positive transformation of warehousing.
About the Author
Haissam Badr is the UK national freight manager for Aramex UK, a multinational logistics, courier, and package delivery company headquartered in Dubai, United Arab Emirates. Aramex UK’s agile and fast-growing division primarily focuses on ecommerce and medical sectors, providing overseas logistics and distribution solutions.