The UK economy may be opening up again but a lack of storage space could stop businesses fully taking advantage of the post-pandemic recovery.
Heralded as freedom day, most areas of the UK removed the restrictions imposed to stop the spread of Covid-19 on July 19. But while this means businesses can now operate as normal, a lack of warehousing space is causing serious issues for many companies.
But why is there a lack of commercial storage space in Britain?
Problems concerning availability of warehouse space in the UK is nothing new. During 2019 and 2020, many businesses started stockpiling goods before the Brexit transition period ended on December 31 2020.
As early as January 2019, the UK Warehousing Association (UKWA) claimed there was a shortage of storage space neat cities as businesses were accumulating stock because they were worried about delays at ports after the UK had left the European Union (EU).
With warehouses already under pressure due to Brexit, the arrival of the Covid-19 pandemic exacerbated the problem and put what little storage space there was left under increasing pressure. In April 2020, 90 per cent of warehouse companies responding to a survey carried out by UKWA said they were completely full, suggesting that just 10 per cent of commercial storage suppliers had capacity remaining.
UKWA CEO Peter Ward said a storage crisis had been triggered by orders placed before lockdown arriving at UK ports when retailers and manufacturers had been forced to shut.
He said: “With outbound flows severely reduced or stopped altogether as stores and factories are closed, inbound flows have become a mounting problem.”
Pandemic added to existing problem
A record 50.1 million sq ft of commercial storage space was taken up during 2020, according to the estate agency Savills. This figure included 20 million sq ft of new build warehousing, created to meet the increased demand.
The lockdowns imposed during 2020 and the start of 2021 saw a surge in online shopping. And the ecommerce giant Amazon saw its sales soar so much that it expanded its warehouse space, taking up a quarter of the UK’s available space.
In April 2021, the estate agency Knight Frank estimated that the UK only had enough warehouse space for another 10 months if demand continued at the same rate with the storage shortage being particularly severe in London and the south east.
The company said that demand for space was only to grow further and it was possible that the 40 million sq ft in warehousing expected to be created during 2021 would still not be enough to meet the nation’s needs.
One of the biggest reasons for the high demand for warehouse space is the rising popularity of ecommerce. While shoppers turned to the internet during lockdown because they had no other choice, experts believe many consumers will stick to buying more of their goods online even though bricks and mortar stores have now reopened their doors.
It is estimated that an additional 750,000 sq ft of warehousing space is needed for every £1 billion extra spent online.
And the unpredictability caused by Brexit and the Covid-19 pandemic has seen a shift in attitudes from retailers and manufacturers with increasing numbers wanting to keep larger amounts of stock on hand in case the unexpected happens again.
The importance of having a robust supply chain was highlighted in March 2021 when the Suez canal was blocked for six days, causing major issues for the global shipping industry. Data from Lloyd’s List estimated that $9.6bn of trade was held up by the stranded vessel for every day it stopped traffic passing along the waterway as normal.
How can AP+ help?
Manufacturers and retailers in the furniture and homeware industries need large amounts of storage space for their products but it is not usually cost-effective for them to invest in their own warehouses.
AP+ provides third party logistics (3PL) to businesses operating in the furniture and homeware sectors, providing both warehousing and distribution facilities so they don’t need to worry about whether they have enough space to store the stock needed to fulfil customer’s orders.
At AP+, we have a large 300,000 sq ft purpose-built warehouse with excellent transport links, making it easy for items to be distributed quickly to locations all over the UK. And we don’t just provide storage space for stock, our team can pick, pack and distribute orders as well as manage any returns.
Using cutting-edge technology to manage orders and inventory in real time, we take the stress and uncertainty away from our clients. We also use carrier comparison software to find the best and most cost-effective carrier to deliver each order so it arrives with the end customer on time.
To discuss how AP+ could make life easier for your business, contact our team today.