Largely as a result of the growth of e-commerce but partly as a result of the uncertainties around Brexit, average take-up of warehouse space has almost doubled in the last nine years to 30 million square feet according to estate agents Savills.
The build-to-suit warehouse construction method has dominated this growth, with this accounting for up to 50% of all transactions in 2016 but this was largely down to a lack of speculative units in the time period. As more speculative construction takes place, so Savills believe that this is likely to change in the coming year.
Kevin Mofid, head of industrial research, said: “For those who witnessed the last recession back in 2008, there is still residual nervousness around speculative development. However, 10 years later we are looking at a very different landscape where vacancy rates are as low as 3 per cent in and around London and the South East and there is simply not enough supply to satisfy the current demand.
“Assuming occupier demand doesn’t fall dramatically and there isn’t a significant increase in second hand supply, we believe that this is the perfect level of development to sustain the market moving forward.”
Richard Sullivan, national head of industrial & logistics at Savills, said: “We believe that the currently level of speculative development remains just right to fulfil outstanding demand. However it is important that we continue to respond to occupier requirements and provide the right space at the right time and in the correct locations. Vacancy rates of up to 10 per cent can be tolerated and in fact will likely redress the current rental imbalance we are currently experiencing in supply starved markets.”
Separately, news reports suggested that the government, when exploring the potential to book frozen and chilled food to stockpile food ahead of Brexit, discovered that all available capacity had been booked already. Rumour has it that the capacity has been taken by Amazon, ahead of a possible grocery launch later this year.
Tag Archives: Logistics
McColl’s transition to Morrisons’ supply completed
After the collapse of P&H last year, convenience store company McColl’s has announced it has fully transitioned to Morrisons Supply for its 1,300 stores. The company has however warned that there are bumps in the road and things have yet to fully bed in.
In a trading update, McColl’s said: “The speed of this transition has created significant challenges and severely disrupted our plans for the launch of Safeway.”
Chief executive Jonathan Miller said: “2018 has been a very difficult year for the business, marked by unprecedented supply chain disruption and on-going challenges. I am, however, extremely grateful for the continued hard work of all my colleagues and the on-going support of Morrisons.
“Looking ahead, we expect competition in the grocery retail sector to remain intense and we face into significant cost pressures. Important to our future success will be continuing to develop our partnership with Morrisons, alongside our plans to enhance our neighbourhood convenience offer by improving the quality of our estate and our overall customer experience.”
Commercial drivers safest, BMW drivers least safe
WMB Logistics have published a survey suggests that commercial vehicle drivers are the safest drivers on the road in terms of the amount of hours they spend driving compared to the accident rate.
The survey asked 2,267 drivers over the age of 18 with a driver’s license and their own car. They were asked as to how safe they felt on the road and their feelings as to other road users. This was as part of an ongoing study as to British people’s attitudes to road safety.
The top five safest drivers were found to be:
Lorry drivers – 22 per cent
Parents – 21 per cent
Delivery drivers – 13 per cent
Coach drivers – 11 per cent
New drivers – 10 per cent
The worst drivers were those behind the wheel of BMW 1 Series cars, the survey found.
“It’s great to see that lorry drivers are considered to be the safest on the road, and we particularly pride ourselves on having the best drivers,” said WMB Logistics spokesperson.
FTA backs Withdrawal Agreement
The Freight Transport Association (FTA) has come out in favour of the draft Brexit withdrawal agreement and is calling on MPs to vote in favour, on basis that there will be frictionless trade in the logistics sector.
“If the UK’s complex supply chain is to be protected,” said FTA deputy chief executive James Hookham, “it is vital that a deal is reached with the EU.” He stressed that a No Deal outcome to negotiations is not an option as “so much depends of the nation’s economic success depends on the maintenance of a successful, resilient supply chain.”
“Logistics and supply chain managers who would struggle to keep essential supplies flowing if the UK leaves the EU on 29 March 2019, and goods suddenly become subject to new customs declarations and duty payments and to conformity checks and inspections at the EU border,” said Hookham
The trade association believes that the Withdrawal Agreement will allow for frictionless trade to continue beyond 29th March next year until at least the end of 2020 when the FTA believes that a new free trade agreement with the EU will be completed.
“Frictionless trade always was and remains FTA’s Brexit goal and conversations at number 10 last night confirmed that this is an urgent priority for the government’s negotiating team. What is clear, and what I and other business leaders at the event hammered home is that No Deal is No Option if Britain is to continue trading efficiently with Europe and the rest of the world.
“While the next two weeks of political manoeuvring will undoubtedly be complicated,” said Hookham, FTA and other businesses “are stressing to the Prime Minister that a No Deal outcome would be bad for the logistics industry, and bad for business as a whole.”
DHL: global trade growth slowing
DHL’s Global Trade Barometer shows that that global trade is slowing, though still in growth.
The DHL report looked at international and containerised ocean trade and this, according to a statement from DHL, “indicates that the development of the previous quarters will continue: Indices for all seven countries that constitute the GTB index are above 50 points, which corresponds to a positive growth forecast according to the underlying methodology. “
Brexit has badly impacted the UK with its GTB falling by four points and its growth forecast is set to fall even more. The DHL statement continued, “This makes it the index country with the weakest growth forecast: With 53 points, the UK is only slightly above the 50-point mark, which indicates stagnation in trade growth.”
Overall growth however is slowing according to the index. The statement continued, “This deceleration will be particularly strong in Asia (except for China): Index values for India, Japan and South Korea have dropped by eight, six and five points respectively compared to the previous release of the GTB in September. With an overall index of 75 points, India, however, continues to be the country with the strongest trade growth forecast.”
“The DHL Global Trade Barometer clearly shows that the state of global trade remains solid. Both, air and ocean trade, continue to grow around the world. However, given the smoldering trade conflicts, especially between the US and China, and economists’ expectations that the global economy could cool down, it is not entirely surprising that trade momentum has weakened slightly”, said Tim Scharwath, CEO of DHL Global Forwarding, Freight.
The DHL statement continued, “Trade growth in the US (61 points) and China (58 points) remains solid. Both countries’ momentum of growth is slowing only moderately by two and one points, respectively – even though both countries would have much to lose if their trade conflict escalated.”
CEVA – new COO and growth plans
Swiss CEVA Logistics is to buy out the freight management business of CMA CGM, its biggest shareholder as part of its growth plans to achieve global revenues of more than $9bn by 2021.
As part of the wider growth plans, CEVA has also hired Nicolas Sartini to be COO and deputy CEO from January. He is currently acting CEO of the CMA CGM APL business.
CEVA chief executive Xavier Urbain said: “With the support of our strategic partner CMA CGM, I am proud to open a new chapter for CEVA Logistics and announce that we can accelerate our transformation and turnaround action plan in the next three years and beyond. This can be achieved by a combination of our commercial and sales focus, cross selling with CMA CGM customers, our own productivity actions, the integration of CMA CGM Log within CEVA and sharing resources with CMA CGM in the field of procurement and administrative functions.
“I am very happy to welcome Nicolas who has successfully turned around the APL shipping company as my Deputy and COO.”
China Post and Lufthansa add Shanghai route
China Post and Lufthansa have agreed to run a joint e-commerce freight operation that will initially see a weekly service between Frankfurt and Shanghai.
The two companies have already been working together though the new agreement, using a Boeing 777F freighter would be the “foundation of a strategic cooperation”.
“The e-commerce business is in a vigorous development,” said Li Xiong, vice president of China Post Group Corporation. “Both China Post and Lufthansa Cargo are upgrading and innovating the business model.
“Under the concept of the Joint Freight Operation, the two sides have reached a further consensus on capacity agreement this time. We will jointly build a more stabilised and comprehensive channel of air mail transportation connecting China and Europe.”
This is particularly interesting as China Post has a 49% stake in domestic airline China Postal Airlines that has 22, Boeing 737s and seven 757s.
China Post and Lufthansa have focused on working together into Beijing and Guangzhou. Shanghai’s addition to the routes is a crucial development. In addition to the capacity agreement they were “jointly working on shortening transportation times, improving quality and further developing digitalisation”.
“We are very pleased that the excellent collaboration with China Post, which has been going on for many years, is now even gaining new quality within the framework of a strategic cooperation,” said Peter Gerber, CEO of Lufthansa Cargo.
“It also reflects the growing importance of the cross-border e-commerce market. Together, we will be able to achieve even more for our joint customers on one of the world’s most important tradelanes.”
Tadeau Pimenta to be CEVA MD Australia & NZ
Swiss CEVA Logistics has appointed Tadeau Pimenta to be its MD of the Australia & New Zealand cluster. Pimenta is head of Logistics South America for CEVA Logistics at present, but will take up the new positions in January 2019. He will report directly to the CEO, Xavier Urbain.
Pimenta takes over the role from Carlos Velez Rodriguez who has decided to pursue other career opportunities but who will work with Pimenta to ensure a smooth handover.
Pimenta has been at CEVA for 17 years. The company describes him as “a results driven, performance-focused team leader with a wealth of experience across both Freight Management and Contract Logistics.” Pertinent to his new role at CEVA, Pimenta has lived in Australia and Asia and has a good knowledge of how the industry operated in those regions.
Speaking about Pimenta’s promotion to his new role Xavier Urbain says: “Milton is a very astute operator with an energetic, commercial mind. He is a true team motivator who is ideally placed to lead the Australia & New Zealand cluster in the next step of its development. I also want to thank Carlos for his valuable contribution in the turnaround of the business there and for developing one of the most impressive Contract Logistics campuses we have in the CEVA world”
WMB Logistics – people more scared than not by tech
A survey of more than 2000 members of the public by WMB Logistics has found that 40% of people are scared by current and predicted advances in technology while only a third are excited by them.
According to the research the five scariest advances in technology were conscious machines (30%) self-driving lorries (24%), virtual home assistants (21%), virtual reality (13%), self-driving cars (9%).
In a demographic breakdown the WMB Logistics survey found that Baby Boomers were the most concerned (33%) followed by the Silent Generation (23%), Millennials (20%), Generation Z (15%) and finally Generation X (9%).
When asked what it was that scared them about conscious machines, the top responses were found to be ‘they’ll eventually have a mind of their own’ (47 per cent) and ‘they’ll end up replacing humans in work and other areas’ (29 per cent).
When asked what worried them about self-driving lorries, respondents cited ‘I don’t trust that they’ll be reliable and as quick to react as a human would’ (62 per cent).
John Lewis installs real-time delivery information system
Omnichannel retailer John Lewis has installed a new Paragon Live Management software system that allows it to share real-time delivery information across the store network.
With the new system in place, the John Lewis central transport office is able to share up-to-date arrival times with every one of its 51 stores nationwide. This will mean that store managers will be able to see the exact time of each delivery vehicle and this ensures that the relevant stock management partners are available, increasing vehicle turnaround speed and reducing internal calls to the transport office service desk.
Ben Farrell, head of central operations and transport, said: “Successful supply chain management in a digital world is all about visibility. By adding Paragon Live Management to our existing Paragon solution we can quickly share vital information across the Partnership. This helps us to make better use of John Lewis partners in each shop and provide a better experience for our customers.”