Warehousing marketplace approaching maximum capacity

A survey of logistics and warehousing operations, conducted by UKWA (UK Warehousing Association), has revealed that lack of available warehousing space in the face of COVID-19 restrictions is reaching a critical point, with potential for zero capacity within weeks.

90% of respondents in the UKWA survey, designed to identify and quantify the current impacts of COVID-19 on the industry, confirmed that they were totally full, suggesting that the market has just 10% pallet space availability.

According to CEO Peter Ward, this crisis has been driven by outbound flows of non-essential goods grinding to a halt in the face of retail and manufacturing closures due to restrictions, while inbound flows continue to arrive at UK ports.

“With outbound flows severely reduced or stopped altogether as stores and factories are closed, inbound flows have become a mounting problem,” he says. “Inbound supply chains cannot simply be turned off. Orders placed and dispatched before the lockdown will continue towards destination, arriving at ports, requiring receipt, handling, onward distribution and storage.”

As retailers’ distribution chains become full, they are expected to turn to the third-party sector to provide annexed warehousing and, with current estimates of available storage capacity at around 1.5 million pallet spaces nationwide, Ward predicts the UK marketplace has approximately 2-3 weeks of capacity.

“UKWA estimates an import volume through south/south east deep-sea ports of approximately 45,000 teu per week for the foreseeable future,” he explains. “This weekly volume is likely to require storage of some 750,000 pallets each week until lockdown is eased and retail stores re-open. Although we expect numbers of fulfilled orders arriving in the UK to be dropping off by the end of May, over the coming month, the search for additional space could become desperate.”

In response to the rising crisis, UKWA has set up an Emergency Space Register on its website, where all available space identified will be collated and shared on a weekly basis with immediate effect.

UKWA members and non-members are urged to share details of any space opportunities with the association, to enable UKWA to match supply and demand to help alleviate the current pressure on space.

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This article was written and/or edited by the UK-based MIN team.

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