Warehouse of the Future - Flickread

£12 | August 2022 www.logisticsmanager.com

GREENING IT UPThe world of packaging is becoming a lot more efficient….

GREEN SUPPLY CHAIN MACHINEHow is logistics becoming more environmentally conscious

22PEAKED YOUR INTEREST?How are the supply chain experts planning for peak season

18 24

The future of warehousing will see a switch to more efficient and sustainable technologies....

In a warehouse far far away….

WAREHOUSE OF THE FUTURETaller, greener, and full of robots: What does the future hold for warehousing?

15

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3

www.logisticsmanager.com August 2022

CONTENTS

EDITOR’S LEADER 04

NEWS & ANALYSIS 06

l MALORY DAVIES: Discusses the PPEstockpiling disaster and suggests thatgovernments must work smarter in preperationfor another unplanned global eventl Logistics Manager Unveils a huge move for theone and only IntraLogisteX exhibition.... l ALAN MCKINNON: Talks about the Scottishreferendum debate and how it will impactlogistics in the region

l PAUL TRUDGIAN: discusses the benefits ofpartnering with a 3PL and how it could affectproductivity in the supply chain

BEHIND THE SHED 32

l Some feel-good stories from the sector, including: Feed those kids, 60 million steps, Letthem grow, and Don’t forget Ukraine

COVER STORY: WAREHOUSE OF THE FUTURE 15

Tall stories Taller, greener, costlier, and full of robots: the warehouse of the future will look very different as Malory Davies finds out….

INSIDE INNOVATIONS: PEAK PLANNING 18

Have I peaked your interest?Michelle Mooney evaluates the pitfalls of a busy peak period and how to overcome it

REGULARS

l EDITORIALActing Editor Michelle Mooney (020 8037 1784) [email protected]

Contributing Editor (Property) Liza Helps (01449 673 952) [email protected] Art Editor Numa Randall, [email protected] l SALES & EVENTSBusiness Development Robert Gouge (020 8065 0465) [email protected] Development – Property Iain McLean (020 4558 0311) [email protected]

Ad Production Katy Holloway [email protected]

Head of Marketing – Exhibitions Ross Sturley (020 8037 1775) [email protected]

Marketing Assistant Michael Grimsley (020 8037 1780) [email protected]

Event Operations Manager Belinda Wong (0208 037 1779) [email protected] Managing Director Stephen Brooks (020 8037 1773) [email protected] Publisher Akabo Media Ltd l ISSN 1353-5595 l Printer Brown Knight & Truscottl Subscriptions Logistics Manager, c/o ESco, Trinity House, Sculpins Lane, Wethersfield, Braintree, Essex, CM7 4AY, UK. Tel: 01371 853601. Email: [email protected]

Circulation: 10,110 (ABC Jan to Dec 2021)

Logistics Manager is a controlled circulation magazine published twelve times a year. Applications for inclusion on our free circulation list will be considered from individuals residing in the UK whose job

function meets the terms of our controlled circulation. To apply, please complete either the reader application card in this issue or our online form at http://www.logisticsmanager.com/apply. Logistics Manager is also available on subscription to ‘non-qualified’ readers at £104.99 per year in the UK and £204.99 per year outside of the UK.

Opinions expressed are those of the individual contributors and do not necessarily imply that such opinions are held by the publishers. Although every effort will be made to ensure the accuracy of all information published, the publishers cannot accept responsibility for claims made by contributors and advertisers.

All rights reserved. No part of this publication may be produced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission of the publishers.

© 2022 Akabo Media Ltd

Follow us on Twitter Twitter.com/logisticsmanagr | Go to www.linkedin.com and search for Logistics Manager Magazine | Editorial: [email protected]

FEATURESPROPERTY SPECIAL MID BOX 28In from the coldLiza Helps Discusses why mid sized properties are more popular than ever before

PROPERTY NEWS 27l Oz online retailer snaps up Nottinghamshedl Ocado launches rapid delivery service inLeedsl Goodman to develop 1.2 million ft2logistics scheme in Luton

PROPERTY

£12 | August 2022 www.logisticsmanager.com

GREENING IT UPThe world of packaging is becoming a lot | more efficient….

GREEN SUPPLY CHAIN MACHINEHow is logistics becoming more environmentally conscious

22PEAKED YOUR INTEREST?How are the supply chain experts planning for peak season

18

24

The future of warehousing will see a switch to more efficient and sustainable technologies....

In a warehousefar far away….

WAREHOUSE OF THE FUTURETaller, greener, and full of robots: What does the future hold for

warehousing?

15

16

GG.007, Metal Box Factory, 30 Great Guildford Street, London SE1 0HS

10

Scan me to launch the Logistics Manager website!

12

28

32

http://www.logisticsmanager.com













http://www

http://www.linkedin.com


https://twitter.com/logisticsmanagr

CONTENTS/LEADER4

August 2022 www.logisticsmanager.com

3PLs are increasingly investing in the

development of integrated order management and logistics delivery systems. Their aim is to make the customer transaction process seamless and fully traceable, from receipt of the order to final deliveryPaul Trudgian , Managing Consultant at Paul Trudgian Consultants

QUOTES OF THE MONTH

CONTENTS cont.

Each of the major markets in Scotland require more

new development to address the shortage of prime industrial space. However, rising build costs and a relative scarcity of industrial land makes it difficult for developers to commit to new projects across ScotlandScott Hogan, Senior Surveyor at Knight Frank

In terms of freight, Scotland is relatively self-contained.

In 2020, 89% of the country’s road freight was ‘intra-regional’ compared with an average of 63% in English regions. It might need to become even more logistically self-sufficient if a trade barrier is erected between Scotland and the rest of the UK (RoUK)Alan McKinnon, Professor of Logistics, Kuehne Logistics University Hamburg

Omnichannel means being able to sell

products seamlessly either directly delivered to the customer, made ready for pick up in store (regardless of whether it is in stock at the store) or via an in-store purchase.Fergal Glynn, VP of Marketing and Enablement at 6 River Systems

INSIDE INNOVATIONS: SUSTAINABLE LOGISTICS 22

Green supply chain machineWith consumer buying habits changing to reflect a more conscious world, Michelle Mooney asks how supply chains are transforming to be more sustainable....

INSIDE INNOVATIONS: PACKAGING 24

Greening it upRe-thinking packaging production and taking responsibility for environmental impacts could be as important as reducing, re-using, and recycling, Johanna Parsons says.

22

20

Times are changing

This August, we have special news covering all

the best aspects of the supply chain!

First up we have a special ‘Warehouse of the Future’ feature covering the very latest trends and technologies in the modern warehouse, including robotics, ‘green’ processes, and rising costs.... More on page 15.

Next we have a Peak Planning special where we will consider how warehouse operatives and retailers alike are setting works in motion to keep up with 2022’s anticipated demands. Read more on page 18.

We will also take a look at a Sustainability special and dive into what the experts believe will make the modern

supply chain more sustainable and efficient. Go over to page 22.

Packaging packaging..... the curse of many warehouses. So just how are logistics

managers paving the way to more reliable, reusable, and efficient packaging designs? More on page 24.

This issue will feature two very special property pieces. One on Mid Box schemes, and then a London and South East special where the

experts delve into the distribution centre abyss. Check these out from page 28 onwards.

And now onto the Awards.... yes, the Supply Chain Excellence Awards are back and you can find out all about how to book your table for this glamorous supply chain event! Page 10 ;)

Finally, some light news to finish off this month’s issue, with Behind the Shed; featuring feel-good logistics stories, on page 32.

See you all next month....

Michelle Mooney, Acting Editor

Editor’s Leader

This August, we have special news covering all the best aspects of the supply chain!

6


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NEWS & ANALYSIS6


space in the CBS Arena (formerly the Ricoh Arena) which is the reason for the move to the larger NEC venue.

The exciting event cuts through the growing noise in the industry and provides you with

the go-to platform for discovering logistics innovations.

But that’s not it…. For 2023 IntraLogisteX will be co-locating with Robotics and Automation.

The exhibition will bring robotics, automation and

future technologies from all industries together, allowing

the visitor to view and engage with companies leading this exciting

sector. Robotics and Automation is for

NEWS, FEATURES, & OPINION BROADCAST AT WWW.LOGISTICSMANAGER.COM

■ InPost reaches 4,000 parcel InPost reaches 4,000 parcel locker marklocker markLAST MILE Out-of-home and eCommerce delivery company InPost, has announced that it has now successfully deployed 4,000 locker units across the UK, having doubled the number of these since last August. The company has continued its rollout of parcel lockers across Tesco’s large-format store estate, announced in September.

■ Amazon to create 4,000 new Amazon to create 4,000 new jobs across the UKjobs across the UKLOGISTICS Amazon has announced that it is creating more than 4,000 new roles across the UK, increasing its current employee workforce to 75,000. The online giant has created 40,000 jobs in the last three years. In addition the company’s operations side of the business is estimated to support more than 410,000 additional roles.

■■ M&S buys Gist for £145 M&S buys Gist for £145 millionmillion3PLS Marks and Spencer is set to acquire Gist as it looks to grow its food supply chain. The acquisition is expected to accelerate M&S’s plan to modernise its Food supply chain network to support growth. Gist provides the majority of M&S Food logistics services via a network of 8 primary and 10 secondary distribution centres located across the UK and Ireland.

■ Royal Mail loses £1 million a Royal Mail loses £1 million a daydaySUPPLY CHAIN The mail carrier has reported an 11.5% loss in revenue in Q1 2022, which reflects weakened retail trends and a return to a “structural decline in letters”. Royal mail has warned that its progress on Pathway to Change has stalled, creating a £100 million deficit. Royal Mail is considering a departure from its subsidiary company GLS as a result.

IntraLogisteX is backEight years since it launched, IntraLogisteX is back in 2023, and will be moving to the NEC in Birmingham!

IntraLogisteX - the greatest materials handling-focused show – has grown exponentially over the last few years, and despite coming out of a global pandemic,

the show has seen tremendous success in the last two years. And 2023 will be no different, as the show, which is hosted by Logistics Manager, will be moving to the NEC in Birmingham due to its growth. The new location for the show will allow even more exhibitors and innovators to showcase their latest intralogistics technologies.

IntraLogisteX is for logistics professionals who are looking for solutions to their current and future challenges, from the latest materials handling technologies to full-scale warehouse automation options. This event is designed for end-user practitioner logistics professionals

such as warehouse managers, heads of distribution, IT directors and lead project managers.

The event will allow for a range of technologies to be showcased; from autonomous mobile robots and automated guided vehicles to conveyor systems, picking and packing systems, and more. Not only will the latest technologies be available for visitors to explore, but there will be more conference sessions than ever before.

The last few years has seen the show sell out

95% of visitors said that they would

recommend IntraLogisteX their

peersLogistics Manager


NEWS & ANALYSIS 7


■ New property categories at New property categories at the Supply Chain Excellence the Supply Chain Excellence AwardsAwardsSCEA AWARDS This year’s Supply Chain Excellence Awards are back on November 8th and there are several new categories available to enter, including property categories! these include; Property Contribution to Social Impact and Well-Being, Property Partner of the Year, Property Contribution to Net Zero Goals Awards!

■■ Firethorn receives green Firethorn receives green light for new logistics sitelight for new logistics sitePROPERTY Commercial real estate investor and developer, Firethorn Trust, has secured planning approval to deliver a 340,000ft2 logistics scheme in South Yorkshire. The 24 acre site, Barnsley340, will comprise of Grade A warehouse space of 320,000ft2, in addition to 20,000ft2 of office space.

■ Geek+ and Systemex Geek+ and Systemex Automation partner to expand Automation partner to expand AMR deployment in North AMR deployment in North AmericaAmericaROBOTICS Geek+ has entered into a strategic partnership with systems integrator Systemex Automation, to offer customers Geek+’s range of picking, moving, sorting and storage/ASRS AMR solutions. The agreement comes directly after a series of new additions to Geek+’s AMR range.

■ CitySprint to recruit more CitySprint to recruit more than 500 new couriersthan 500 new couriersROAD TRANSPORT Same day distribution company CitySprint has announced that it will hire 550 additional couriers across the UK, with the company focussing primarily on those with small and large vans. The new couriers will be added to the pool of over 3,500 vans, bikes and cars, as CitySprint continues to grow its business and win new clients.

professionals from a variety of sectors who are looking to discover how they can optimise their operations utilising the latest robotics, automation and future technologies.

Visitors are primarily from retail, manufacturing, automotive, distribution, warehousing and pharmaceutical with a mix of senior level decision makers with the job titles; Engineer, Director, MD / Owner, Operations, Heads of Supply Chain, Head of Logistics, Manager, Technical Managers.

And like IntraLogisteX, visitors to the Robotics and Automation show will be able to attend world-class conferences.

There is still plenty of time to book a stand at IntraLogisteX or reserve a sport as a visitor for what will be our biggest show to date! ■

Time for a little schadenfreude…

Supply chain and procurement professionals

have been on the receiving end of some fairly harsh criticism over the past year or two as supply chains have struggled to maintain supplies in the face of a series of major challenges, notably Covid.

So perhaps hard pressed managers can allow themselves a little innocuous pleasure at the roasting that the government has just received from the House of Commons Public Accounts Committee. – schadenfreude, as they say in Germany.

The committee has just produced its report on the Department of Health & Social Care’s performance for 2020-21, the height of the Covid epidemic. These are some of the key points.

It says that the department has written off £8.7 billion of the £12bn it spent on personal protection equipment (PPE) during the year. (That’s £129 for every person in the country.) Of that, £4bn worth of PPE didn’t meet NHS standards. Some 817 million of the items of were defective - including counterfeit products.

Not only that, the report says: “The Department confirmed that work is ongoing to sort through the vast quantity of PPE held and it had

still not yet opened all of the shipping containers of PPE to inspect the stock.13 Until this process is complete, there is a risk that the estimates of unusable PPE rises further.”

This is not the end of the problem. The report points out that the department now needs to pay for the disposal of millions of items of PPE, the cost of which is still unclear.

Not only that, some £1.3bn of DHSC spending did not have the necessary Treasury consent and is therefore “irregular”.

The be fair to the DHSC, it was engulfed by a set of circumstances that no-one could have predicted, as a result of the appearance of Covid-19. The stockpile of PPE held before the pandemic was enough to last only two weeks and it clearly had to respond in with unprecedented agility to a massive demand for equipment.

The committee report says: “In order to meet the urgent demand, the department

adapted its normal procurement and inventory management controls. This has contributed to a significant loss of value to the taxpayer and left the department open to the risk of fraud.”

Clearly, the government will have to rethink how it responds to events of the scale of the pandemic.

One obvious action would be to increase the stockpile of PPE to meet future challenges.

But the department reckons that if it held a stockpile big enough to deal with a pandemic equivalent to Covid-19 it would be value for money only if there was a pandemic every 12 years.

It is unrealistic to hold immense stockpiles of goods for events that happen as rarely as the Covid-19 pandemic. But it is realistic to expect the government to be better prepared than it obviously was.

Malory Davies

The Department confirmed that work is ongoing to sort through the vast quantity of PPE held and it had still not yet opened all of the shipping containers of PPE to inspect the stock.13 Until this process is complete, there is a risk that the estimates of unusable PPE rises further.


Bigger.Better.Birmingham NEC.

Registration is free for qualifying professionals!www.intralogistex.co.uk @IntraLogisteX #ILX23

28TH & 29TH MARCH 2023, NEC BIRMINGHAM

ILX DPS AUG 22 REDO;.indd 1ILX DPS AUG 22 REDO;.indd 1 25/07/2022 14:1225/07/2022 14:12

http://www.intralogistex.Bigger

http://www.intralogistex.Bigger

Bigger.Better.Birmingham NEC.

Registration is free for qualifying professionals!www.intralogistex.co.uk @IntraLogisteX #ILX23

28TH & 29TH MARCH 2023, NEC BIRMINGHAM

ILX DPS AUG 22 REDO;.indd 1ILX DPS AUG 22 REDO;.indd 1 25/07/2022 14:1225/07/2022 14:12

NEWS & ANALYSIS10


Anyone is welcome to attend the Awards for an

exciting night with their colleagues and peers. You do not have to

be an entrant or finalist to book, so secure your place now for the biggest social event of the supply chain year! ■

Book your table! The Supply Chain Excellence Awards are back for their 26th year and it looks like it will be the biggest night of excellence yet!

The 26th Supply Chain Excellence Awards are almost here! And Logistics Manager is gearing up for the most exciting night of the year for the supply

chain industry. The coveted Awards will see a range of talented, innovative, and downright excellent winners.

With a multitude of categories, including new property categories, social responsibility categories, and more, the night will host the very best in the industry.

Now, you have the opportunity to book your place on the night. So sit back, enjoy the food, enjoy the glitz, enjoy excellence!

Each table consists of ten seats. You can also book individual seats.

You will receive a ticket for each seat you book and this ticket will grant each guest access to a pre-Awards drinks reception, three-course dinner, Awards ceremony hosted by a special guest celebrity, post-Awards entertainment, documentation, and invaluable networking opportunities.


The Scottish Government is planning to hold a second

independence referendum on October 19 2023. This depends on the UK government granting approval and/or the Supreme Court judging it legal. In the meantime, we can reflect on the logistical challenges that an independent Scotland would face.

A recent Scottish Parliamentary report acknowledged that ‘Scotland’s supply chains are closely integrated with those of the rest of the UK and globally’. Many companies have optimised their logistics systems across the UK as a whole, exploiting scale economies and the benefits of inventory centralisation.

Many UK businesses, however, distribute their products nationally on a uniform delivered price basis, not charging Scottish customers for the higher freight costs associated with peripherality. The main exceptions are parcel companies and online retailers that often charge higher rates for delivery to more remote Scottish post-codes.

In terms of freight movement Scotland is relatively self-contained. In 2020, 89% of the country’s road freight was ‘intra-regional’ compared with an average of 63% in the English regions. It might need to become even more logistically self-sufficient if, post-independence, a trade barrier is erected between Scotland and the rest of the UK (RoUK).

Such a barrier would have been created with the EU Single Market had Scotland become

independent after the 2014 referendum and been forced to leave the EU, at least temporarily. In 2016, Scotland voted overwhelmingly to stay in the EU and resentment over being ‘dragged out’ by Brexit-supporting English voters now fuels much of the support for independence. The ability to re-join the EU is central to the case for separation.

On regaining EU membership, an independent Scotland would be re-integrated into the Single Market and Customs Union. The formation of a ‘hard border’ with the RoUK could then require extensive customs and regulatory checks as 67% of Scotland’s ‘imports’ come from the RoUK and 62% of it ‘exports’ travel there. In trading terms, Scotland is much more tightly coupled to the UK than Northern Ireland and has no equivalent to the ‘Good Friday Agreement’ to block the creation of a hard border.

In June 2022, Scotland’s First Minister, Nicola Sturgeon conceded that ‘there will be customs and regulatory issues on trade if we are in the Single Market’, but insisted that ‘the benefits of Scotland being independent far outweigh any of these challenges’. This is reminiscent of the assurances made during the Brexit campaign that ways would be found to resolve border issues on the island of Ireland that have since proved vacuous.

Logistics and trade issues did not feature prominently in Scottish independence debates back in 2014. Brexit has now shown how critical they are to changes in a country’s sovereignty and how intractable they can be. If IndyRef2 gets the go-head, those campaigning for independence will need to spell out much more clearly how it will impact on supply chains and freight flows.

Alan McKinnon

A Logistical Perspective on Scottish Independence

NEWS & ANALYSIS 11

Alan McKinnon

Sponsors:

The Top 50 Logistics Service Providers 2022, a ranking of the UK’s top 3PLs and 4PLs, will be published

on 5th December 2022

This will coincide with a series of online broadcasts from 5th-9th December which will reveal

the Top 50 and feature interviews from some of the industry’s most

respected CEOs and thought-leaders

To be included in our detailed analysis of the industry’s fastest-growing providers,

please contact [email protected]

Would you like to be considered for this year’s Top 50?

Top 50 1/2 Page - August Issue 2022.indd 1Top 50 1/2 Page - August Issue 2022.indd 1 25/07/2022 12:0125/07/2022 12:01

Scotland’s supply chains are closely integrated with those of the rest of the UK and globally



1500+ visitors

of visitors have or planned to place an order as a result of

Robotics and Automation*

Coventry Building Society Arena

1st & 2nd November 2022

2022 Exhibitors so far...

Discover...

conference sessions

95% exhibitors

of visitors said they would recommend

Robotics and Automation to their

peers*

20

140+

52% *results from the visitor survey

Registration is free for qualifying professionals!

Visit the UK's largest dedicated robotics and automation event!

www.roboticsandautomation.co.uk @roboticsautoex #roboticsauto22

Robots/Robotic Systems

Automated Assembly Machines & Systems

Parts Handling Equipment

Conveyors & MaterialsIndustrial

Automation Control

Automatic Identification & Data Collection

Machine Vision

Imaging Equipment/Systems

RFID

Untitled-2 1Untitled-2 1 25/07/2022 15:2825/07/2022 15:28

http://www.roboticsandautomation.co.uk

1500+ visitors

of visitors have or planned to place an order as a result of

Robotics and Automation*

Coventry Building Society Arena

1st & 2nd November 2022

2022 Exhibitors so far...

Discover...

conference sessions

95% exhibitors

of visitors said they would recommend

Robotics and Automation to their

peers*

20

140+

52% *results from the visitor survey

Registration is free for qualifying professionals!

Visit the UK's largest dedicated robotics and automation event!

www.roboticsandautomation.co.uk @roboticsautoex #roboticsauto22

Robots/Robotic Systems

Automated Assembly Machines & Systems

Parts Handling Equipment

Conveyors & MaterialsIndustrial

Automation Control

Automatic Identification & Data Collection

Machine Vision

Imaging Equipment/Systems

RFID

Untitled-2 1Untitled-2 1 25/07/2022 15:2825/07/2022 15:28

NEWS & ANALYSIS14


Up up and awayThe air cargo industry is bouncing back after two years of uncertainty, but just how close are we to normal air freight volumes, Michelle Mooney asks.

IAG Cargo recently released its financial results for Q2 2022, showcasing revenues of €411 million from the period of April 1st to June 30th 2022. These results

take the international carrier’s half year revenue to €843m, which is 9.6% up on the first half of the previous year. These numbers are a culmination of IAG Cargo’s Q2 2022 tonnage which was up 4.6%, whilst overall yield saw a reduction of 2% at constant currency versus the same period last year, despite the return of passenger-led capacity. Despite uncertainty in the global supply chain, IAG has opened up new routes, which has been vital in the delivering of goods across the automotive, agricultural, and perishables sectors. However, the ongoing conflict in Ukraine has led to a slight dip in capacity, and the International Air Transport Association (IATA) revealed that capacity was 2% below compared to the previous year due to the war, as several key airlines based in Russia and Ukraine which were “key cargo players” have been impacted. Additionally, the zero-Covid-19 policy in China has led to capacity challenges due to flight cancellations and labour shortages. “Air cargo demand fell by 11.2% in April and capacity contracted 2% compared to April 2021,” says Willie Walsh, IATA’s Director General. However, despite capacity drops in Europe and Asia, the Latin American region saw a 40.9% uplift in cargo volumes in April 2022 compared to the previous year, which allowed it to be the strongest region. ■

Why you should partner with a 3PL

As your business grows and evolves, your logistics

requirements may fluctuate reflecting expected seasonal demands, but also potentially unexpected changes in the market. These fluctuations may, at their simplest level, lead to changes in required staffing levels. However, they could also lead to more major change requirements in terms of your logistics network – changes to warehouse size, warehouse location, fleet profiles, modal selection etc.

A 3PL will typically have a large asset footprint with networks of warehouses and large vehicle fleets that can be utilised to absorb changes in their client contract requirements. Changes in your logistics requirement can be implemented rapidly with minimal business disruption to you and your customers. Technological developments in the supply chain, such as robotics and AI, are attracting

larger numbers of students to study supply chain and logistics at both an undergraduate and postgraduate level. 3PLs position themselves to attract this upcoming talent. Their graduate training programmes specifically focus on supply chain planning or logistics operations management. They invest in career progression training schemes and their structures provide for functionally focused career progression. In short, 3PLs

can be a much more attractive proposition for supply chain talent than other industry-specific companies.

Additionally, 3PLs are increasingly investing in the development of integrated order management and logistics delivery systems. Their aim is to make the customer transaction process seamless and fully traceable, from receipt of the order to final delivery. The purchase,

configuration, maintenance and continued development of these systems requires significant expertise, time and money. However, it’s something that a 3PL can afford to invest in as these systems are deployed across their entire customer network, making the cost to the individual customer contracts negligible.

One of the biggest issues for any company with international trade is how to set up and manage the logistics network in new territories. There is a huge potential risk, when entering new territories, in trying to deal with managing a logistics network where regulations, laws, geographies and culture may be dramatically different to the domestic territory.

In this situation, it makes perfect sense to outsource the logistics operation to a 3PL who has an in-country presence. In these situations, the 3PL can bring further value by taking some of the administrative burden associated with exporting goods to, and delivering within, non-domestic territories. This may include licensing, import/export paperwork checking and document retention in accordance with the country’s regulations.

Paul Trudgian

NEWS, FEATURES, OPINION & BROADCAST AT WWW.LOGISTICSMANAGER.COM

■ Worldwide Flight Services deploys CHAMP’s Cargospot solutionTECHNOLOGY Worldwide Flight Services has transitioned 15 of its air cargo handling stations in France to CHAMP’s Cargospot (SAAS) solution. WFS signed a contract with CHAMP at the end of last year to implement Cargospot as its core cargo management system.

One of the biggest issues for any company with international trade is how to set up and manage the logistics network in new territories. There is a huge potential risk, when entering new territories, in trying to deal with managing a logistics network where regulations, laws, geographies and culture may be dramatically different to the domestic territory.

■ Knowles Transport partners with Bidfood ambient product servicesFOOD & DRINK Food service wholesaler Bidfood has partnered with Knowles Transport which has become its consolidated distribution partner for ambient products. As part of the contract, Knowles Transport will handle, consolidate, and deliver a range of ambient products for Bidfood’s suppliers.

■ NHS and Unipart partner for fully electric trucksHEALTHCARE The NHS will soon be receiving medical consumable products delivered by a fleet of eight fully electric trucks, as part of the Department for Transport’s £10 million Battery Electric Truck Trial (BETT). NHS Supply Chain and Unipart Logistics are part of the 12 month pilot initiative which will see 20 DAF LF Electric trucks providing services to the NHS.

■ DB Schenker chooses Conveyor Systems LimitedINTRALOGISTICS Global logistics provider DB Schenker has chosen Conveyor Systems Limited to design and install an automated picking and replenishment system in Tamsworth. The space efficient and solution CSL eliminates the need for order pickers to carry totes from one warehouse floor to another, minimising the risk of accidents and injuries.



INSIDE INNOVATIONS: WAREHOUSE OF THE FUTURE 15

Taller, greener, costlier, and full of robots: the warehouse

of the future will look very different as Malory Davies

finds out….

Tall storiesThat warehouse that you built 20 years ago might have been cutting edge then, but supply chains have moved on – it might be in the wrong location, it might not be optimised for today’s operational needs, and it might not meet the

latest energy standards – an increasingly important factor given the enormous increases in fuel costs in recent months.

Professor Richard Wilding highlights the fact that companies are increasingly focused on procuring for resilience rather than simply for costs. There is the well recognised move to on-shoring or near-shoring. And many organisations are looking at multi-shoring, he says, pointing out that there is no point in multi-sourcing if all the suppliers are in one place.

But these are not the only factors, says Wilding, pointing to the development of warehouses from being simply storage locations to value-adding operations offering some final manufacturing and product configuration.

He sees this process continuing with the warehouse of the future increasingly being used for a combination of manufacturing and configuration centre. The warehouse is also a good location for servicing and repair of certain products, he points out. And he sees a growing role for warehouse-based 3D printing for certain products pointing out that several different industries could use this to reduce stockholdings of items that are ordered only infrequently.

Not only are operational changes having an impact, rising energy prices have focused people’s minds of what kind of warehouse real estate they occupy, says Kevin Mofid, Head of EMEA Industrial and Logistics Research at Savills.

Companies are looking at onsite power generation such as solar panels. “If you have onsite power generation, warehouses are going to be cheaper to run.”

As well as power generation, companies are looking at energy saving technology. Mofid points out the energy performance of warehouses is increasingly under scrutiny. 90% of warehouses under 100,000ft2 have EPCs of C or lower. “Older, smaller

n (Below) Ferag Skyfall 4 pouch sorter

buildings can be very challenging in terms of energy efficiency.”As a result, occupiers are looking for better quality buildings.

“We are definitely seeing occupiers being mindful of the cost to run a building.”

Demand is increasing, says Mofid, who highlights the expansion of online retail. “The trend is here to

stay.”Not only that, the trading issues with European

Union countries mean that many businesses are increasing inventory levels to improve the resilience of their supply chains. As a result,

companies are increasingly needing more warehousing. Mofid sees multi-storey warehouses becoming more

popular in the future. There is a limited amount of land for warehouses and rents are rising. Supply is at its lowest point ever, while demand is higher than ever. “We are predicting rent rises,” says Mofid.

Growing use of robotics and automation means there is more emphasis on using the full cube of the building, says Mofid. As a result, warehouse heights are increasing from the tradition 12.5m to 20m and over. “Height is going to be a differentiator.”

Andrew Weyer, Chief Information Officer at DHL Supply

US$22.15 is the predicted size of the autonomous mobile robot market by 2030

(StayLinked)



INSIDE INNOVATIONS: WAREHOUSE OF THE FUTURE16

SOME THINK RETURNS HANDLING IS COMPLICATED.WE THINK DIFFERENT.

beumer.com

BG Pouch Systeme_LogisticsManager_210x148_EN.indd 1BG Pouch Systeme_LogisticsManager_210x148_EN.indd 1 13.01.22 15:0113.01.22 15:01

Chain, agrees that scarcity of land “means we need to be smart about how we design and operate warehouses. Robotics and automation solutions are big enablers when it comes to using space wisely. New technologies allow for higher density storage supported by goods-to-person delivery on autonomously guided vehicles, creating highly efficient environments.”

Supply chain is controlling everything currently, according to Eric Carter, Solutions Architect at Indigo Software. “We’ve still got these massive peaks and troughs to deal with. It means businesses are having to flex their warehousing capacity to cater for ever changing supply issues and the changing needs of customers. One way to do it is to have smaller, micro warehouse

Its not just shortage of labour, the key thing is there’s far more volume going through piece picking warehouses than before. Nick Hughes, Sales Manager, Invar Integration

WHAT ABOUT THE WORKERS?It’s no secret that the industry is facing a

labour shortage, but can companies use technology instead of people?

Fergal Glynn Vice President of marketing and enablement at 6 River Systems, says: “With more warehouse vacancies available than people wanting to take them, the UK Warehousing Association revealed that its members had reported having to increase pay by between 20% and 30% to secure entry-level positions. Warehouse operations must work hard to present themselves as providing

attractive career opportunities,” says Glynn.Nick Hughes says: “Its not just shortage of

labour, the key thing is there’s far more volume going through piece picking warehouses than before, so it’s the fact that the number of people required is not able to keep pace with the increased demand. It’s stretching the labour pool that is there. The requirement for increased capacity is a big driver for automation.”

However, Richard Wilding points out that reduction in labour cost is often less than

might be expected. He quotes one global retailer that compared labour costs at a traditional warehouse employing 250 people with labour costs at a highly automated site employing ten people. The wage bill at the automated site was only 5% less, because of the highly skilled nature of the work.

Conal McGuirk. Chief Operating Officer of Conker says: “In spite of the increased adoption of technology I firmly believe that there will always be humans in warehouses. It’s just a case of ensuring that the technology is fit for purpose and relevant for the human operatives within the warehouse environment.”


https://www.beumergroup.com


INSIDE INNOVATIONS: WAREHOUSE OF THE FUTURE 17

sites that serve orders for a particular region. Alternatively, they may be taking up much bigger space and consolidating their warehousing into a single, purpose-built space – if they have the money to do it.

“Rising warehousing costs are potentially devastating for smaller businesses especially. They will have to pass on many additional costs to the consumer, which is just going to compound the inflationary pressures that we’re seeing in the UK right now. Having a WMS can help ease some of the pressures of coping with a smaller warehouse space because it enables up to 30% more stock to be stored in a given area,” says Carter.

Darcy de Thierry, Managing Director of Ferag UK, highlights the challenges faced by the fashion sector: “Successful fashion retailing is all about maximising margin, growing sales volume, and getting faster throughput. But for the last two years, omni-channel businesses have, by necessity, had to rely on their e-commerce channels for survival. The strain on fulfilment centres has been enormous, particularly as ‘single’ and ‘few’ item picking and packing operations are traditionally highly labour-intensive activities – and labour has become a scarce and costly resource, leading to concerns over performance during critical peak periods.”

The past few years have seen growing interest in robotics. Richard Wilding highlights the fact that full automation is not appropriate for all types of products, so many operations can benefit from collaborative robotics using relatively low-cost robots. He points out that the investment can be as recouped in as little as nine months.

Nick Hughes of Invar Integration takes up the point saying that with the cost of labour rising and availability falling, businesses will have little option but to adopt higher levels of automation, and in many instances that means robotics. “Their low-cost, excellent flexibility and great scalability makes them the ‘must have’ warehouse technology of today,” he says.

Key technologies going forward will be those that improve efficiency, ease the pressure of the labour shortage, and drive down energy consumption, says Weyer.

“The Internet of Things (IoT) has huge potential across supply chains and in the warehouse. Condition monitoring will help us reduce energy consumption, create a comfortable and healthy environment for colleagues, reconfigure the operational set-up to maximise productivity, provide predictive maintenance data based on usage and inform how future buildings are designed.

“Because this technology has such major potential to optimise the way our buildings cater for our needs, all DHL new builds in the UK will be specified to include IoT analytics as default. One key example is linking IoT monitoring directly to air conditioning to optimise and maintain correct temperatures so to minimise energy used but also to ensure the integrity of products that need to be temperature controlled.

DHL is ramping up the roll-out of AGVs and assisted picking robots, along with goods-to-person robotics. This combined with automated storage and retrieval solutions is orchestrated through a single digital platform. Digitalising repetitive processes through the adoption of Robotic Process Automation tools has also been an area of focus and the key has been fully integrating these solutions with our Human Resource to effectively manage all resources to maximise availability and output. Using algorithmic optimisation and identifying continuous improvement opportunities through advanced data analytics is also an increasingly important area,” says Weyer.

Padraig Regan, Chief Product Officer of StayLinked, which produces terminal emulation solutions, points that the autonomous mobile robot market size was valued at USD 1.61 billion in 2021 and is predicted to reach USD 22.15 billion by 2030, according to a recent report, Autonomous Mobile Robot Market by Type, by Application, by End-User – Global Opportunity Analysis and Industry Forecast 2022-2030.

“However, future warehouse operation leaders will face the same barrage of information, hype, and noise around robotics, just as those of today face. Ultimately it will come down to affordability; businesses will always seek to increase uptime and efficiency in their warehouse operations, but it will come at a cost,” says Regan. ■

NOT READY TO AUTOMATE?Automation will become more

important, but it is still expensive – and there are other technologies that might be worth looking at.

Indigo’s Eric Carter sees many SMEs investing in elements of automation instead, like a robotic packing arm to speed up processes, without having to fully automate. “At the moment, the cost of implementing a WMS versus full automation for companies that are using manual paper-based systems is very favourable.”

Invar’s Nick Hughes reckons that augmented reality is likely to start appearing in warehouses in the near future. Trials are in progress at the moment for AR glasses that can be used to guide an individual to picking locations. In a way, it’s like a SatNav

for the warehouse, but offering a head-up display with information, so no need for a hand-held terminal. The issue at present is cost, but hopefully, prices will come down as the technology takes off.”

Fergal Glynn of 6 River Systems, reckons that automation-as-a-service is a growing business model “where automation technologies can be deployed on an as needed basis. Importantly this enables warehouse operations to expand or trial technologies like robotics without needing to undertake a demanding purchasing process.”

He also expects to see growth in multi-modal optimisation “allowing seamless integration with vendors, logistics providers and other supply chain partners.”

Third party logistics providers have been seeing a noticeable increase in demand for

warehousing in recent years. Traditionally, 3PLs have been unwilling to invest in automation because of the risk that they will never see a return on the investment, but that could be changing.

Rhenus is opening a multi-user logistics centre at Bönen in Germany which will be highly automated. Manufacturer Spax will be the first customer at the 106,000sqm site which will combine different, automated guided vehicles, such as very narrow-aisle

trucks, pallet stacker and autonomous mobile robots. Complete automation is used to transport the goods to a wide variety of work areas, store them and make them available for subsequent processes in line with needs.

The company said automation met the challenges posed by a shortage of specialist personnel in the logistics sector. “We regard this site as a beacon project,” says Andreas Mayer, a member of the Rhenus management team.

Dionne Redpath, Europa Worldwide’s Chief Operating Officer, and Warehouse Division

Director, believes that: “Growing demand means there will always be a need to provide the ultimate flexibility. Business partners of 3PL providers will always demand the very best of everything, be that the level of customer care provided, the space and set up available, or the ability to shift from e-commerce to omni-channel distribution. Suppliers also need to ensure they are agile enough to provide added value-added services to customers, which means allowing space within a warehouse specification to provide this.”

It’s not just manufacturers and retailers…

87% of industry decision-makers are in the process of planning

an expansion of their warehouses by 2024

(Zebra)



INSIDE INNOVATIONS: PEAK PLANNING18

Peak season is always a difficult period of time within the supply chain calendar because of a rush in demand during the latter half of the year. However, if these last two years have taught us anything, it’s to expect the unexpected. Tom Beqiraj, Warehouse Manager of Priority Freight explains that the company has a multitude of

systems and processes in place to ensure that even at the highest peak of demand, every item gets the “same efficient service.” To this end, the company operates “dual forklift unloading”, which segregates stock by customer and by SKU to ensure productivity. Every item, whether fast- or slow-moving, is “fully tracked through precise inventory management control”, says Beqiraj.

Similarly, Wouter Satijn, Sales Director at Joloda Hydraroll focuses on the importance of automation when delivering results during and leading up to peak season. He says that “automating warehouse operations can help lower operating costs, improve scalability to meet demand efficiently, improve reliability when it comes to hitting tight delivery deadlines, and ultimately do more with less”. The importance of this, he adds, is that automation can help “improve the day-to-day experience of current employees, who will otherwise bear the brunt of increased demand combined with today’s recruitment challenges.” For example, by automating the loading and unloading process, what typically could take more than 30 minutes manually, can be achieved in “just two or three minutes.” During times of peak demand, HGV drivers simply cannot wait hours outside of warehouses for unloading or loading slots to become available, Satjin adds.

Employing the bestDuring periods of high demand, particularly in the latter months of the year, companies often increase the number of internal employees. Ben Bhattal, General Manager at Zeelo says that the company “naturally ramps up [its] own internal staff during the ‘Peak season’ to deal with heightened enquiries from both riders and clients.” He says that Zeelo’s biggest benefit is how it can work with HR and resourcing teams “to identify new geographical labour pools they wouldn’t usually be able to target due to poor public transport links in rural areas or assisting with particular shifts where public transport options don’t run due to unsociable hours.” The company provides turn-key and plug-in transportation

Any tasks that are carried out manually within the warehouse have the potential to be more efficient through technology. Mike Hayers, General Manager, ShipStation Europe

Peak season is fast approaching, and you know what that means; warehouse operatives

and retailers are beginning to prepare for a rush of orders. Michelle Mooney asks how

peak planning in 2022 is going.

Have I peaked your

interest?programmes to help business manage employees, which is especially valuable when an influx of retail demand, both in bricks and mortar stores, and online, occurs.

Different paths?Fergal Glynn, VP of Marketing & Enablement

for 6 River Systems explains that during peak season, an omni-channel distribution model which includes bricks and mortar and online, can make peak season more difficult. However, A company can overcome this is installing a an easy-to-deploy- warehouse fulfilment solution to cope with demands. “Omnichannel means being able to sell products seamlessly either directly delivered to the customer, made ready for pick up in store (regardless of whether it is in stock at the store) or via an in-store purchase. This means that you need a fulfilment operation that is fast and flexible. Your warehouse (3PL or self-operated) must cope with store replenishment orders as well as single orders for delivery to customers directly, or for collection at the store. Order profiles, lead times, cut off times and priorities are different in each case - many operations don’t even attempt to fulfil from the same location, because managing these often-conflicting work streams is time consuming and difficult”, he says.

However, managing these work streams, he says, results in the utilisation of more space and employee labour than is necessary. And with “current high land prices combined with labour shortages this is not always an economic or efficient strategy.” He adds that most warehouse management systems (WMSs) and physical operations “struggle to achieve the synergies required to accomplish this efficiently.”

Technology forwardConal McGuirk. Chief Operating Officer at Conker explains that the company has historically monitored changing levels of demand to ensure stock of devices that can help its customers manage busier periods in the year. “We have a solid ERP system, with a robust procurement module. With that and our highly efficient supply chain, we’re able to deliver quickly. Unlike our competitors, we have a 48-hour turnaround to supply products. We’re focused on ensuring the availability of



INSIDE INNOVATIONS: PEAK PLANNING 19

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our product’s resulting in greater levels of customer satisfaction,” he says. He adds that data can help improve outcomes during peak season by utilising trend analysis; tracking the demand of a product and helping to pre-empt how stocks are ordered, serve visibility right through when an item is dispatched, through to transportation. Additionally, a thorough system during peak season will involve a range of technologies, he suggests. “Operational efficiency is key and will address the whole warehouse, demonstrating how to save precious time picking and packing, driving greater efficiencies with accurate order fulfilment, to improved planning and how solutions should be integrated. Operatives

75% of supply chain

leadershave faced issues producing and

distributing goods since the pandemic began.(Source; McKinsey & Company

should be looking into a range of products from hand scanners to long-range scanning or voice-command and even wearable technologies – in order to support operational efficiencies. These technologies will also help to identify team efficiencies and where gaps can be filled.”

Choosing what’s right for youPeak is the most demanding time of the year for our industry. As soon as one peak ends, planning for the next one gets underway,” says Mike Hayers, General Manager, ShipStation Europe. This is why it is essential to “deconstruct the fulfilment workflow to better investigate any potential efficiencies that can be made.” Automation is key, Hayers says. “Any tasks that are carried out manually within the warehouse have the potential to be more efficient through technology. It’s imperative to assess the impact of different manual tasks against business ROI. By looking at the cost of human error versus cost of automation, businesses can get an idea of what technologies to implement.”

On the horizon“Given the current marco-economic climate, with the cost of living increasing and consumers tightening their belts, it’s difficult to predict what this peak season will look like,” says Hayers. The last two years have been as unpredicatable as it can get and there is no telling what could happen next in the world of supply chains, but what is key to remember is that planning ahead is essential. Satjin explains that ultimately, “it is vital that if retailers want to keep pace with the digital economy, they must have the right technology in place to meet both expected and unanticipated demand.” What is essentially the most important aspect of maintaining quality during peak season is maximising employee fluidity, because without it, an operation can suffer blows which affect the rest of the supply chain. “To keep on top of influxes, we ensure to plan in priority order, including a continually evolving schedule with deadlines for each order and customer. ■


www.supplychainexcellenceawards.comVisit here to book and learn more about the awards

Categorysponsors:

8th November • London Hilton on Park Lane

TICKET BOOKINGS ARE NOW OPEN

An incredible night of entertainment!

Reward yourself, your co-workers and your customers with a glittering night at the Hilton while networking with top industry professionals

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our celebrity guest

This will be followed by exciting post-awards entertainment

You can now book tables and seats forthe industry’s most prestigious awards evening!

Everyone is welcome to attend the black-tie event for an exciting night with their supply chain peers, you do not have to be an entrant or finalist

to book

The earlier you book, the closer your table will be to the stage

Where? London Hilton on Park Lane, 22 Park Lane, Mayfair, London, W1K 1BE

When? 7pm, Tuesday November 8th, 2022

Celebrating 26 Years of Excellence

This year’s celebrity host is...

Kerry GodlimanComedian & Actor

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http://www.supplychainexcellenceawards.com

www.supplychainexcellenceawards.comVisit here to book and learn more about the awards

Categorysponsors:

8th November • London Hilton on Park Lane

TICKET BOOKINGS ARE NOW OPEN

An incredible night of entertainment!

Reward yourself, your co-workers and your customers with a glittering night at the Hilton while networking with top industry professionals

Our incredible awards night will feature a stunning drinks reception followed by a three course dinner and an Awards ceremony hosted by

our celebrity guest

This will be followed by exciting post-awards entertainment

You can now book tables and seats forthe industry’s most prestigious awards evening!

Everyone is welcome to attend the black-tie event for an exciting night with their supply chain peers, you do not have to be an entrant or finalist

to book

The earlier you book, the closer your table will be to the stage

Where? London Hilton on Park Lane, 22 Park Lane, Mayfair, London, W1K 1BE

When? 7pm, Tuesday November 8th, 2022

Celebrating 26 Years of Excellence

This year’s celebrity host is...

Kerry GodlimanComedian & Actor

SCEA - DPS - August Issue.indd 1SCEA - DPS - August Issue.indd 1 25/07/2022 15:3625/07/2022 15:36


INSIDE INNOVATIONS: SUSTAINABLE LOGISTICS22

Man-made climate change is one of the biggest threats our species and every other species on this planet faces now. Consumers are no longer simply concerned with the sustainability credentials of the retail brands they buy from, but they are now more

conscious of the shipping process involved in getting goods. So, is sustainability important to the companies responsible for delivering and packaging goods? Ofer Nir, VP of Products & Marketing at Inspekto believes it is. “Sustainability has been at the core of Inspekto’s business model since the company’s beginnings in 2017. One of our main goals is to help our customers reduce material waste by offering a vision inspection system that identifies defects early on, so that precious material is not wasted to complete a product destined to be scrapped.” He suggests that by adding quality assurance, Inspekto can save on resources, which also minimises carbon emissions.

To this end, the company is “democratising quality assurance, making it available to every plant, regardless of size, industry or location,” says Nir. It is doing this by offering its ‘INSPEKTO S70’ product to customers which is a system which can installed and deployed by the plant’s personnel without external assistance and without prior knowledge of machine vision or AI. The result of integrating the system is a “higher level of quality control, which contributes to a more stable production process, spotting defects before the product reaches the end of its journey.” By installing such a system, Nir suggests, manual, paper-based processes can be eliminated which ultimately reduces the amount of carbon emissions a company is responsible for.

Ensuring a better world Neil Jordan, Vice President of Logistics and Supply Chain at Proxima explains that the company recently achieved ‘net zero’ in the previous year, and that it is constantly finding ways to reduce emissions for its customers also. It does this through supporting the UN’s Sustainable Development Goals (SDGs) which offers a “shared blueprint for how to approach people and the planet and ultimately give us a guide for the future.” Jordan adds that Proxima also has two carbon offsetting

Performing life cycle assessments to evaluate the environmental impact of the schemes throughout their life cycles. Natali Cooper, Head of Portfolio, Asset Management and ESG, Europe, GLP

With consumer buying habits changing to reflect a more conscious world, Michelle Mooney asks how supply chains

are transforming to become more sustainable.

Green supply chain machine

projects located in China and Kenya and that how the company achieved net zero last year, was through working with Climate Care to offset its emissions. “Whilst offsetting is not the solution in and of itself, it can work in conjunction with greater efforts to decarbonise,” he adds.

When working with clients, Proxima recognised that of the key areas for businesses to drive sustainable change is within their logistics functions. Jordan says that the biggest problems

facing logistics is “how to optimise your fleets to run sustainably”, yet there is no one size fits all

solution. “Biofuels and hydrogen research are gaining momentum as fleets look to abandon their reliance on fossil fuels. In some cases, however, this is falling off the agenda to maintain margins in the face of today’s inflationary market.”

66% of surveyed CSCOs

said sustainability is a core element of overall

business value.(IBM and Celonis)



INSIDE INNOVATIONS: SUSTAINABLE LOGISTICS 23

ESG concerns Environmental, social, and governance guidelines are a prerequisite for any good business practice, as once these are laid out, a company has no excuse but to follow through to achieve better practice. And the most pressing of these concerns for all companies should be the environmental aspect of this framework. Clemente Theotokis, Co-Founder of Zeus Labs explains that the company’s roadmap for sustainable freight is “mapped to the legislative deadlines set out by the UK Government (2035 for ZE vehicles) and matching EU directive.” Additionally, Theotokis explains that Zeus Labs is “currently applying for membership of the Global Logistics Emissions Council (GLEC).” This body has played an important role in developing a standard tracking and reporting of carbon emissions by road haulage vehicles, he says.

Similarly, Janina Nakladal, Global Director of Sustainability at Celonis emphasises the importance of sustainability in a supply chain and argues that “companies are increasingly differentiated by how sustainable they are. And over time, more will realise that through streamlining their processes, they can simultaneously achieve greater efficiency, emit less carbon into the atmosphere, waste less resources and become more compliant.”

Nakladal continues by stating that the company is investing “heavily” in achieving net zero, by promoting sustainability. The company also identifies how best its customers can execute processes and find hidden inefficiencies to remove waste and reduce energy usage. “We most commonly see our customers set goals to become net-zero and source all material sustainably. The challenge is that it is very difficult to operationalise these sustainability strategies due to complexity and hidden process inefficiencies,” she adds.

Natali Cooper, Head of Portfolio, Asset Management and ESG, Europe at GLP adds that “integrating sustainable practices

and ESG frameworks proactively throughout the investment decision making process, including the property cycle journey, is fundamental” to the continuation to the company’s business practice. She says that GLP starts with the planning and development of all new warehouses; “performing life cycle assessments to evaluate the environmental impact of the schemes throughout their life cycles”.

Not only are environmentally conscious warehouse developments good for reducing and limiting emissions, but they are “far cheaper to operate and maintain,” Cooper says. Adding, she explains that “customers can achieve competitive advantages by reducing their operating costs and carbon footprint, because the sustainable approach allows them to reduce energy consumption, greenhouse gas emissions and water usage whilst delivering better working environments for their employees.”

A promise to keep?Oftentimes, many businesses believed that they would need to

sacrifice sustainability for the sake of profit, but in reality, both objectives can be followed for the ultimate supply

chain model. Philip Ashton, CEO and co-founder of 7bridges explains that “concerns about how to

balance resilience and sustainability are common, but the two are closely tied.” Building a resilient business without considering sustainability isn’t viable anymore, and investors and consumers are

now both paying attention to the way climate change impacts businesses. Unfortunately, he says,

many supply chain operatives “overlook carbon optimisation” because they believe that optimising their

supply chain to reduce carbon emissions will require a “large scale transformation project.”

Progression“Sustainability and resilience are completely entwined for supply chains,” says Ashton. He insists that to create a resilient strategy going forward, companies need to consider “carbon and climate impacts, and the vital first step of this is calculating their current carbon baseline.” To do this, he suggests using an AI-powered platform which can help a business understand how to balance “commercial and carbon goals, providing a “green ratio”. AI can also help a business to focus on carbon reduction measures that also saves on costs, safely modelling scenarios and outcomes using a Digital Twin.” ■

GREEN TO GO?According to Saif

Hameed, CEO and Founder of Altruistiq, explains that there is an insidious problem with greenwashing amongst many logistics firms. This only slows progression because real targets are not being met and are instead covered up by buzz words in clever marketing. He says that the company has worked with in-night distributor DANX to create a “living sustainability strategy

around smart route optimisation and vehicle switching.” This visibility, he says, allowed the company to realise fully the emissions produced by its commercial vehicles. This insight allowed for a move from “ambition to action” in the way it tackles climate targets.

Box; Technology is a force-changing asset

When attempting to reduce carbon emissions in the supply chain, it is important to note that technology is

one of the key driving forces for change. Clemente Theotokis, Co-Founder of Zeus Labs explains in terms of direct impact, the company’s platform digitises all workflows, eliminating the need for paper completely. Additionally, he says that as every delivery is tracked and monitored by the platform, “we can plug this into standardised reporting” to provide customers with “complete transparency” on the carbon emissions of their road freight.

80% of a company’s greenhouse gas

emissions come from its supply chain

(Mckinsey)



INSIDE INNOVATIONS: 5 WAYS TO GREENER PACKAGING24

Re-thinking packaging production and taking responsibility for environmental

impacts could be as important as reducing, re-using, and recycling,

Johanna Parsons says.

Greening it up

“Reduce, Re-use, and Recycle” are the obvious starting points for environmentally friendly packaging, but there is more that can be done. Opting for more ethical materials and taking responsibility for the wider life cycle of products could be the keys to true sustainability.

As consumers we have a responsibility to recycle the packaging that comes into our homes or offices, but even this can sometimes seem an unnecessarily complicated chore. “The commonplace experience of receiving small items in grossly oversized packaging has moved from amusing, through annoying, to downright scandalous,” says Jo Bradley, Business Development Manager of Sparck Technologies.

Reducing packaging would seem a simple enough undertaking, but there is often a thin line between too much and not enough packaging. Macfarlane Packaging’s 2021 Unboxing survey canvassed consumers and found that 14% of deliveries were reported to have arrived with too much packaging, down from 16% the previous year.

However, the survey also found that incidences of damaged products had increased year on year from 5% to 9%. Macfarlane reckons this was caused by staff shortages and use of temporary, ergo inexperienced, packers during the e-commerce boom during the pandemic.

It’s tempting to conclude that using less packing corresponds more damaged products. And damaged products are not just a pain for the recipient. Damaged items will usually be replaced and are often returned too, more than doubling the costs and emissions associated with that single purchase.

So, if in doubt, packers must opt for more rather than less packaging. The seemingly ludicrous waste is often down to the prosaic realities of the packing station. If small boxes have run out, they simply must use a large box. Of course, this is not only a waste of materials, but also in terms of transport, a literal waste of space.

“Shipping efficiency is… gaining increased attention,” says Ian Heskins, new business development director at GWP Group. “A recent study estimated that 85 million cubic metres of air – enough to fill 34,000 Olympic swimming pools – is being shipped to UK homes each year.

n (Right) Garçon Wine streamlined wine bottle packaging

“As such, using custom-sized boxes can vastly reduce not only costs (as transit efficiency increases and material use drops) but can also lead to more satisfied customers (43% cite frustration at oversized packs),” says Heskins.

Custom sized boxes are made possible by machines such as the CVP Impack and CVP Everest systems by Sparck Technologies and offered by Conveyor Systems Limited. Automated packing solutions like these, scan

and weigh single or multi-item orders and measure them to erect and cut the

box to size, as well as sealing weighing and labelling.

Custom boxes decrease movement in transit and associated damage, as well as being resource efficient. “By

minimising corrugate use, cardboard consumption reduces by

30% on average and void fill is virtually eliminated,” says Sparck’s

Bradley. She explains that this significantly reduces packaging material costs which she says is significant – “as businesses are well aware, cardboard is under significant upward price pressure.”

“Furthermore, using smaller boxes means a greater density of product per truck or van load… which can significantly reduce transport GHG emissions and costs, as well as other environmental harms, from noise pollution to congestion,” says Bradley.

It’s not just cardboard that can be reduced. Particularly since the Plastics Packaging Tax came into effect this year, reduced, re-used, and recyclable plastics abound.

“Specifically considering logistics and operations, many businesses should consider switching to a returnable packaging setup,” says Heskins. “Although typically utilising plastic totes and other non-recyclable materials, the reusable nature of the packaging means that the overall carbon footprint is considerably lower when considered across its lifetime (as are overall costs, despite the high initial investment).”

John Garner, Head of Innovation and Design

The commonplace experience of receiving small items in grossly oversized packaging has moved from amusing, through annoying, to downright scandalous Jo Bradley, Business Development Manager, Sparck Technologies

8/10 customers want more sustainable

packaging- (The Chartered Institute

of Marketing)



INSIDE INNOVATIONS: 5 WAYS TO GREENER PACKAGING 25

at Antalis Packaging gives the example of a customer that had seen damage rates of 30% – 40% transporting delicate truck lamps packed in polythene bags in boxes. Antalis came up with a reusable design made of laser cut foam within a corrugated carton. A more expensive option at first perhaps, but with a payoff. “There has been a significant reduction in damages and in materials used, and the packaging is reusable,” says Garner.

The biggest source of plastic packaging use for most logistics businesses is stretch film, and Garner says that companies are often using more than they need to. “Through our stretchCONSULT assessment, we have helped customers to reduce their film usage by up to 70%, not only creating savings in terms of material costs but, now the PPT has been introduced, it can help reduce the impact of the £200-per-tonne tax, too. In addition, Antalis has recently introduced a PPT-exempt film containing a minimum of 30% recycled plastic.”

There is a myriad of thinner (that is to say reduced plastic) and recyclable versions of pallet wrap. But the stakes are high, as a pallet stacked full of products represents a huge cost if something goes wrong. So again, product

WINE THROUGH YOUR LETTERBOX?Garçon Wines was founded by Santiago

Navarro and Joe Revell to reduce the stress as well as the carbon emissions associated with missed deliveries by offering wine in bottles that fit through the letterbox.

General manager at Garçon Wines, Alistair Easton explains: “Round glass wine bottles that are fragile, heavy and spatially inefficient are, in our view, no longer fit for purpose in a 21st century world of online sales, complex supply chains, resource scarcity and most importantly, climate change.”

Having come up with the flat wine bottle Garçon Wines needed a postal pack for single bottles of wine. This would have to be thin enough to get the bottle through a UK

letterbox, and protective enough to allow bottles to fall to the doorstep.

Easton says DS Smith helped create the product. “The end design was exactly what we planned for, and we immediately received resoundingly positive feedback from our partners in gifting and online wine,” says Easton.

The single bottle postal pack is made from a combination of FSC certified corrugated materials for the outer liner and recycled fibres for the rest of the pack.

DS Smith also created a larger format pack that significantly cuts carbon emissions and logistics costs from the supply chain of wine. The new style wine case packs eight flat

bottles vertically with two lying horizontally in the airspace around the bottlenecks, so almost all unused airspace is eliminated.

Fitting 2.28 times more wine on a pallet translates to lower costs in terms of packaging, warehouse handling and storage, and transportation. They reckon that this would reduce carbon emissions and costs by at least 60%.

damage is a real concern, and using new or different volumes of materials requires a carefully considered approach.

Bernard Sellars, Managing Director of Lindum packaging says that when opting for recycled content films, it’s important to check the calibration of pallet wrapping machines to ensure that the tension is correct. “Recycled content films behave slightly differently so to make sure that your efforts are rewarded, take the time to get the setup right,” he says.

Switching from plastic packaging can also lead to movement in transit issues. “Packaging made from cardboard is invariably less stable and more prone to failure,” says Sellars. “Any carbon savings made by reducing plastic will be negated by increased supply chain product wastage, so it’s important that businesses look holistically at materials and methods.”

From optimised stacking patterns to using the appropriate level of stretch on a wrap, Sellars explains that there are several factors that must be addressed to avoid damaged products. “Poor quality corrugated packaging can crush as it can’t withstand the pressure of being wrapped and printed, cardboard boxes can slide against each other creating more movement, so a stiffer film is needed to stop sway that can cause damage.”

To that end, Lindum has created a Mobile Pallet Stability Lab, which can analyse the performance of stacked pallets to reveal any weaknesses. The lab uses an accelerator bench to simulate the stresses a loaded pallet is subjected to on sudden braking. Movements within the pallet are measured and analysed to determine pallet stability in accordance with EUMOS standards.

An analytical approach can also be useful in a wider context. Re-thinking product choices considering the entire life cycle of packaging materials, from production to waste disposal, is how real change can happen. “Sustainable packaging is more than simply being recyclable,” says Peter Görlitz, Sustainability Manager, Europe for Sonoco.

He advocates smarter production methods “to reduce the use of new raw materials, electricity and emissions, as well as adhering to regulatory compliance and supply chain considerations.”

Lindum’s Sellars says that there is still a way to go. Tertiary packaging is the unglamorous stuff used to protect goods in transit, like void-fill, that gets put in the parcel at the final stage before sealing. “As primary packaging represents the brand and secondary packaging often comes into contact with consumers too, these challenges were tackled first. Tertiary packaging.… has perhaps been overlooked.”

Sonoco’s Görlitz reckons that consumers are taking matters into their own hands. “Consumers are more aware than ever of their individual responsibility to act more sustainably. Research by Food Dive shows that consumers are shifting their behaviour so they can contribute to the global goal of lowering emissions. In fact, more than half (54%) take sustainable packaging into consideration when selecting a product.”

But sustainability can’t be driven by consumers alone. Shoppers cannot be expected to drill down into the water and energy used in the production of the void fill of each e-commerce order they make.

“Consumers recognise that it is not just down to them, at an individual level,


INSIDE INNOVATIONS: 5 WAYS TO GREENER PACKAGING26

to make these changes,” says Görlitz. “They recognise that brands should be doing the same. In light of this, it is important for brands to be re-envisioning and re-developing their packaging to not only lower their emissions in the long run, but to be seen as a brand that is acting responsibly, as well as making sustainable packaging more accessible to its customers.”

GWP’s Heskins concurs. “There is an ever-growing demand amongst consumers for sustainable and ethical packaging. An excellent example is FSC certified packaging, with as many as 75% of UK shoppers preferring a product featuring the FSC logo over one that does not.”

Forest Stewardship Council certification, for example, ensures that materials are from well managed forests, help preserve indigenous peoples’ lifestyles, ensure fair wages, support local economies, and help build schools and amenities.

A perhaps unexpected ethical stamp for the packaging sector came from Smurfit Kappa, which recently became certified by the Vegan Society. More commonly associated with foodstuffs, packaging with the Vegan trademark uses paper, glue, starch and even inks which are from animal-free products and from eco-conscious suppliers.

On a deeper level, sustainability is about more than the resources you use. “Many packaging companies are taking steps to improve their product portfolio, which is all very positive, but if we are going to change attitudes more widely, we need to be doing all we can not only to minimise our impact but also take visible action by getting involved in projects globally to clean up our waterways and public spaces,” says Storopack’s Managing Director, Richard Pulfrey.

To that end, Storopack for example is a member of the Alliance to End Plastic Waste, Operation Clean Sweep which aims to keep plastic particles out of waterways, and international coastal cleaning programme Big Blue Ocean

14% of deliveries were reported to have

arrived with too much packaging last year

(Macfarlane Packaging)

Cleanup. Likewise, Sonoco is a member of the HolyGrail 2.0 initiative to prove the viability of digital watermarking for sorting packaging waste and to get higher-quality recycling rates.

There are many options for reduced, and recycled materials, as well as opportunities to re-use transit packaging. But there is also value in taking a wider holistic approach. There are many ethical choices to be made - from materials to CSR projects - that can influence a firm’s brand image, and real sustainability. ■


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PROPERTY NEWS 27


Oz online retailer snaps up Nottingham shedEAST MIDLANDS Australian online retailer Cotton On Group has taken an 81,000ft2 warehouse on Blenheim Industrial Estate in Nottingham.

The property was speculatively

built by Wilson Bowden and forward funded by Urban Logistics REIT. The deal complements the previous letting of a speculatively constructed 18,000ft2 unit.

John Barker, Head of Development at Urban Logistics Reit said: “The funding venture with Wilson Bowden Developments has worked well and they have completed the buildings to a high standard.

“The East Midlands element of the portfolio was recently completed so early lettings to Cotton On and All Shires Foods is testament to the tenant demand in the market.”

FHP Property Consultants and M1 Agency were joint agents. Harper Dennis Hobbs acted for Cotton On Group.

Goodman to develop 1.2 million ft2 logistics scheme in LutonEAST ENGLAND Commercial and industrial property group, Goodman, have set out plans to transform Vauxhall after-sales warehouse into 1.2 million ft2 prime sustainable logistics development in Luton,

Bedfordshire.The plans for the 60-acre

brownfield site will see the existing facilities demolished and redeveloped to provide up to 1.2 million ft2 of space with pre-let opportunities from 200,000ft2. Work on the scheme is expected to start in 2023 subject to planning.

Goodman’s vision for the site is to deliver a high quality

commercial park, combining sustainably designed warehouse space with extensive landscaping to provide customers with modern facilities in an attractive workplace environment.

Goodman will take a circular approach to construction, minimising waste and use of resources.

Ocado launches rapid delivery service in LeedsYORKSHIRE Ocado is launching its first Zoom warehouse outside London in Leeds. As reported in Logistics Manager last month the online retailer has taken Unit B Fox Way in Hunslet.

It has just announced that it will run its rapid grocery delivery service Zoom by Ocado from the 17,5000ft2 warehouse. The rapid delivery service offers customers

a range of 10,000 products which can be ordered for delivery within an hour or later that same day.

This is the first of its Zoom operations outside of London and is expected to be up and running in the fourth quarter of 2022.

Ocado currently has two Zoom operations in London – Acton and Canning Town which have so far been successful. It is due to open a third site in Leyton by Autumn.

For each of the new Zoom sites, Ocado will champion hyper-local, artisan suppliers and arrangements will be made to

donate cash and/or surplus goods to local charities.

The Leeds site will open with 100% last-mile green delivery vehicles, comprising a mix of electric cars, e-cargo bikes, and electric mopeds. Shopping will be delivered to customers in recyclable and compostable bags.

PROPERTY PAGE 27Property News; the latest developments in the industrial property market

PAGE 28“The strength and diversity of the occupier base underlying UK multi-let [and Mid-box] is undeniable, the tenant mix has never been so broad,” says John Rodgers, partner at Gerald Eve.

PAGE 30“In crude terms we have seen at least 15% come off the value of land in the last two months alone,” says John Bell, managing partner of property consultancy Glenny

PAGE 32The latest Behind the Shed stories for a quick cheer up. Read about fundraising walking, tree planting, and Ukraine charity efforts.

CONTENTS

IN BRIEF■ AMG Logistics takes last AMG Logistics takes last unit at Prologis Hams Hallunit at Prologis Hams HallAMG Logistics has taken the last available warehouse at Prologis’ Prologis Park Ham Hall scheme in the West Midlands. The 3PL has taken the 85,000ft2 speculatively built unit, known as DC4, on a 15 year lease ahead of practical completion later this summer.

■ Iron Mountain to take Iron Mountain to take Kettering shedKettering shedIron Mountain is take a 312,00ft2 warehouse at Tritax Symmetry’s Symmetry Park in Kettering. The announcement comes just days after the global announced that it plans to launch its first UK campus at Symmetry Park in Rugby, Warwickshire.

■ Stoford on board for Stoford on board for Stannah’s new Andover Stannah’s new Andover factoryfactoryDeveloper Stoford is to develop a new 90,000ft2 factory at Andover Business Park for stair lift company Stannah aimed at streamlining its production process. The building will have various sustainability credentials.

■ Sainsbury’s snaps up Sainsbury’s snaps up Trafford Park Mid box Trafford Park Mid box warehousewarehouseSainsbury’s has secured a pre-let from Harbert Management Corporation on a speculative midbox at Guinness Point, in Trafford Park. Sainsbury’s has signed a 15-year lease and Avison Young acted for the retailor.



PROPERTY: MID BOX28

In from the cold

Mid-box and terrace warehouses have never been more popular but

why now? Liza Helps reportsMid-box warehousing is seemingly all the rage at present, but it has not always been so, in fact only four years ago many locations round the UK were reporting that no Grade A mid-box warehousing of quantum had been built in

nearly a decade.Much of this can be put down to the cost of land and the

fact that industrial developers could not match the prices being paid by competing land uses such as residential, offices or retail.

In addition, rent levels had stagnated and were just not high enough to make the development appraisals work as building smaller units is in general more expensive than building larger schemes where economies of scale can be levered.So, what changed? In crude terms the rise of ecommerce, which itself was turbo-boosted by the pandemic. Suddenly there was a huge upswing in activity from occupiers, as the growth in e-commerce, Q-commerce (on-demand grocery and meals) and more widely ‘last mile’ and ‘urban logistics’ added to the base of traditional occupier demand.

Indeed John Rodgers, partner at Gerald Eve says: “The strength and diversity of the occupier base underlying UK multi-let [and Mid-box] is undeniable, the tenant mix has never been so broad.”

According to Tim Clement, head of the UK multi-let industrial logistics at JLL: “Occupier demand for multi-let and mid box space is very broadly based, in contrast to the big box logistics market which is dominated by a relatively small number of large businesses.

“The traditional sources of demand include trade counter operators, automotive repair and maintenance, self-storage, manufacturing and engineering and last mile delivery, including e-fulfilment. In addition, since the pandemic, the market has seen an explosion in demand from on-demand grocery operators and providers or users of ‘dark kitchen’ space.

“The former includes companies such as Getir, Gorillas and Gopuff whilst key players in the latter include Deliveroo and Just Eat. In the past two years alone these two ‘sectors’ have taken hundreds of facilities across the country, including more than 150 units in London alone.”

Gerald Eve’s partner Josh Pater agrees: “There is increased competition in this size bracket with local and sub regional occupiers – who by their very nature are wedded to specific location and geographies - now competing with the national operators from the logistics sector.”

Tritax Symmetry is speculatively developing a number of units at its Symmetry Park Biggleswade scheme in Bedfordshire. Almost always exclusively a ‘Big Box” developer, Tritax has brought forward a 75,000ft2 facility to make the most of the development opportunities on the awkward shaped site. And according to Tritax Symmetry’s development director Tom Leeming: “There has been very strong demand from a range of occupiers both local and regional. The depth of interest from occupiers in the building has led to four parties expressing interest and proposals out to a couple before practical completion.”

Indeed, where there is space, it is being snapped up. According to JLL’s inaugural Multi-let and Mid-box industrial market report,



PROPERTY: MID BOX 29

which presents data on demand and supply based on new buildings between 5,000 and 99,999ft2, in 2021 some 11.5 millionft2 was taken up in new units across Britain, with 6.1 millionft2 taken up in units between 5,000 and 49,999ft2 and 5.3 millionft2 in mid box units of 50,000ft2 and over.

The market fundamentals of strong demand and constrained supply has led to vacancy rates of sub 5% and according to JLL, rents for mid-box and multi-let spaces over the past 12 – 18 months, have surged as a consequence.

“In 2021, prime headline rents for units between 10,000 – 20,000ft2 jumped 16% based on an unweighted average of 59 markets JLL monitors, while rental values for ‘standard industrial’ rose 10.9% according to [global research analyst] MSCI. In the first quarter of 2022, prime rents rose a further 6%, and MSCI rental values for ‘standard industrial’ posted an additional 3.2% uplift.”

The pace of rental growth is phenomenal. Edward Peel, a director at Stoford Developments, says: “We have seen significant increases in the market rent even from the period between starting on site to practical completion.”

No wonder investors are interested. According to MSCI’s data, the multi-let and mid-box market has delivered the highest total return for investors over the past five years. In the five years to end 2021, ‘standard industrial’ delivered a UK total return of 18.2% per annum, compared with an industrial return of 17.5%, an office return of 5.5% and a negative retail return of -2.2%.

“The past couple of years,” says Jon Sleeman, research director at JLL, “has seen huge investor demand for industrial and logistics stock in general, including multi-let and mid-box industrial asset, which are widely seen as integral to the growth of ‘urban logistics’.

“The market fundamentals from an investor perspective have been highly attractive for at least three to five years and, as a result, the base of active buyers has become much bigger and more diversified.

In 2021 around £3.2 billion was transacted across the UK in multi-let industrial estates out of a revised JLL estimate of £14.7 billion for all industrial and logistics property. In the first quarter of 2022 the respective numbers were £655 million and £2.2 billion.

Peel says: “There is a weight of money seeking industrial product - a reflection of the sector as a whole – and investors are seeing rents increasing dramatically and looking to get hands on product to take advantage of rental growth and lack of supply.”

For those willing to go up the risk curve there is plenty of market evidence that if they build units themselves or forward fund development, those units will be let ahead of practical completion or very shortly thereafter. No longer do appraisals have to factor in a void period.

Property developer HBD saw all five units of its latest 82,000ft2 speculative phase at its The Quad scheme on the 83-acre Butterfield Business Park in Luton let or sold prior to practical completion. Adrian Schofield , senior director and head of region at HBD says: “The letting of all five units prior to practical completion demonstrates the demand for well -located quality space.”

With this kind of activity, it is no surprise to see that developers and investors are keen to go forward with speculative development, which is good news for occupiers.

“Although it has long been the case that the multi-let and mid box market has seen relatively little new speculative development compared with the big box market,” says the JLL Multi-let and Mid-box report, “by the end of March 2022 there was around 6.2 million ft2 of speculatively developed floorspace immediately available in units between 5,000ft2 and 99,999ft2 across Britain, with a further 11.5 millionft2 under construction and available.

“The immediately available space equates to just over 6 months’ supply compared with 2021 take-up, while the addition of the space under construction brings the total supply to around 18 months of 2021 take-up.”

Despite the seemingly large supply coming forward, there seems to be no let-up in schemes coming forward. Peel says that this can be put down to developers seeking to build units in quantum rather than individually.

“Build costs have risen dramatically and this can mean there are viability issues developing out a single smaller unit. However, building in quantum to allows for leveraging economies of scale across a scheme.”

It seems to be a common theme; 4th Industrial is forward funding/developing a three-unit scheme of 213,000ft2 with Interchange 26 - a joint venture between Opus North and Network Space Capital - in West Yorkshire. It intends to speculatively develop out two units of 64,500ft2 and 43,500ft2 and is in planning for a further unit of 105,000ft2.

Trebor Developments is bringing forward a five-unit scheme at Eastern Gateway, Ipswich in Suffolk. Units will range from 10,000ft2 up to 55,000ft2 and will be built on a speculative basis at the Sproughton Road site. The developer plans to start work on site this autumn, subject to planning with the first sheds ready for tenants before summer 2023.

Not far away in Braintree, Marshgate Group has secured funding from CBRE Investment Management to speculatively develop a three-unit scheme with warehouses ranging from 30,000ft2 to 70,000ft2 on a 7.7 acre plot at its 65-acre Horizon 120 development.

Delivery is expected in the last quarter of the year. ■

We have seen significant increases in the market rent even from the period between starting on site to practical completion.Edward Peel, Director, Stoford Developments Corporation

6.2M of speculatively built

warehouse space between 5,000ft &

99,999ft2 by the end of March 2022

(Source; JLL)

A third of all multi-let industrial schemes need sustainability improvements in the next five years to be lettable according to research by Gerald Eve, to

comply with minimum energy efficiency standards.From its dataset of over 13,300 units between 500ft2 and 50,000ft2 in

size, around 2% of the market in London and the Southeast, and 5% of the market in the regions have EPCs of F or G and will therefore fall below the required standard by April 2023. A much more significant proportion of real estate is graded D or E: 34% in London and the Southeast, and 46% in the regions. Without intervention, these will become non-compliant by April 2027. Particularly at-risk regions include the Northwest, Scotland, Yorkshire and the Humber, and the West Midlands.

Cordelia Batt, Senior Surveyor, and part of Gerald Eve’s Sustainability team says: “Awareness and accountability surrounding sustainability has been brought into sharp focus in recent years and many occupiers are now scrutinising their accommodation and demanding greater energy efficiency. Under the current regulation, the trajectory of the Minimum Energy Efficiency Standards (MEES) is from an EPC E in 2023 to an EPC B by 2030. This has brought EPCs to the forefront of landlords’ attention, not least since 88% of non-domestic properties will need to be improved over the next 10 years if they are to remain compliant. This represents a significant challenge to the industry, and robust strategies are needed to minimise the risk of stranded assets.”

Is it lettable?



PROPERTY: LONDON30

If you can’t stand the heat….

From white hot to red hot – is the market really cooling

down? Liza Helps reports

n (Main) Dartford Powerhouse 300

Property consultancies, agents and investors say the logistics sector in the London M25 region is stalling - but it is all comparative: instead of being likened to a ‘white hot’ fire it is now just ‘red hot’ – but what does that mean for occupiers.

Unfortunately, not much; supply is still inadequate, and rents are still high certainly for the time being. The slowdown is being seen in the property investment and developer market as the cost of money soars. Basically, in order to tackle what is seen as rampant global inflation (at its highest in 40 years in the UK and the US around 10% and 9% respectively) the National banks around the world put up interest rates, which in turn raises the cost of borrowing money.

Looking just at US investors, who have been exceedingly active the UK logistics property market over the past two years, recent interest rate hikes by the US Federal Reserve have in effect doubled the cost of borrowing.

In March this year the FED raised interest rates by 0.25%, the first increase since 2018. Then there was a 0.75% hike in the rate in June, the most aggressive hike in interest rates since 1994, and many are expecting a similar hike shortly.

For John Bell, managing partner of property consultancy Glenny: “Interest rate rises and build cost inflation will make it cost more to build the same product and ultimately that means it has to come off the price of land.”

Colliers’ head of industrial research Andrea Ferranti agrees: “We have seen the costs of debt increasing significantly, which makes property yields move out. With yields normalising, land values have to adjust to reflect that.”

And that is where the market is stalling at present. Ferranti says: “This is more due to monetary policies than to demand itself.”

Until recently land prices had been on a seemingly endless upward trajectory Collier’s research noted that land values in

the Southeast rose by 60.5% (y/y) in January 2022 from £1.6 million per acre to £2.5 million an acre, while London values witnessed even stronger average growth of 79.9% (y/y) from £3.9 million an acre to £7.1 million an acre in January 2022.

Key land transactions saw Trammell Crow paying approximately £2 million an acre for 19 acres in Milton Keynes; Panattoni paying circa £3.7 million an acre for 10 acres in Crawley and Bridge Industrial purchasing 2.6 acres in Croydon for approximately £5.7 million an acre.

The most eye-watering deal in the last 12 months occurred when GLP acquired the highly reversionary with development potential, 12 Waxlow Road scheme in Park Royal (41,781ft2) for circa £51 million at a NIY of 1.05 per cent. Basically, putting land prices in Park Royal at £16 million an acre

“However, since then,” says Bell: “In crude terms we have seen at least 15% come off the value of land in the last two months alone.”

Some agents are putting that higher with land values of £12million an acre only securing £9 million an acre now – however, with assets trading off market usually to underbidders when they fail to sell, it is difficult to know a true open-market value.

Looking at land prices in the round though since 2017 the average price per acre has increased by 175% in certain locations. In essence then, land that would have only made £3 million an acre now sits at nearly £9 million an acre so a reduction over the past few months is hardly something to cry over.

Whether that holds true or not (and obviously will depend on when you acquired the land) Colliers’ head of industrial Len Rosso says: “Across the board deals that were in the offing are back under scrutiny.”

Whatever the hiccup in the investment/development market,



PROPERTY: LONDON 31

demand fundamentals remain valid. “With some 26.5 million ft2 of enquiries and only 9.5 million ft2 of supply [in units over 50,000 ft2] we fundamentally expect demand to outstrip supply by a significant margin,” says Bell.

One of those looking to secure space in the Southeast is Next plc, which has had its planning appeal for a 566,400 ft2 scheme in Epping Forest dismissed. The retailer whose online offering continues to grow had hoped to build a warehouse, photo studio and multi-storey car park on a 23-acre site on land north of Dowding Way to serve all of its retail stores and customers in the southeast.

Developers are still trying to fill the gap and to that end there are currently some 22 units under construction across the region totalling 3.57 million ft2, 85% of which are based in the Southeast and just 15% within London.

There are, in total, 17 units under construction within the 100,000-200,000ft2 size band, three within the 200,000-300,000ft2 size band and two within the 300,000- 400,000ft2 size band.

There are a plethora of units coming through in Milton Keynes with GLP bringing forward two new units of 117,000ft2and 140,000ft2 at its G.Park Milton Keynes scheme at Willen Lake, while AEW with Allianz Real Estate is looking to develop out a nine-unit scheme totalling 760,000ft2 which will be developed by Frontier Estates on a phased speculative basis. Construction is expected to begin on site over the summer with practical completion due in Spring 2023.

Trammel Crow is also moving forward with its redevelopment of the former Arcadia building. The 19.4-acre site will see the development of three Grade A speculative logistics buildings of 221,000ft2, 71,000ft2 and 46,000ft2 of space. Construction has started with an expected completion date of spring 2023.

There are schemes in London and around the M25 as well and these include Goodman’s Purfleet scheme totalling 334,000ft2, which is currently under construction.

The highly sustainable development will be delivered to a BREEAM ‘Excellent’ specification and will include a full rooftop array of solar PV, solar thermal hot water, rainwater harvesting, infrastructure for electric vehicle fleets and smart metering.

It has 18m clear internal height, a 55m yard depth, as well as 32 dock and four level access doors. There is parking for 59 HGVs and 263 cars. The warehouse also boasts a 65 kN/m2 floor loading as well as 4 MVA power supply.

In Dartford Bericote is constructing its 300 at the Powerhouse scheme totalling 302,790ft2.

The unit will boast 21m clear internal height, 55M yard depth and up to 3MVA power supply. It will be built to BREEAM Excellent standards, and include 20% EV parking spaces, along with a roof ready for 100% solar PV coverage.

Smaller units are also being developed by Goodman at its 477,370ft2 at Dartford’s Crossways Commercial Park, across the M25 motorway from Powerhouse. The scheme includes three units of 240,884ft2, 138,062ft2 and 101,659ft2.

Panattoni has two units in Belvedere totalling 114,473 ft2. The scheme known as Units 2A and 2B are semi-detached with one of 52,129ft2 and the other 62,344ft2. They are available either individually or as a combined 114,473 ft2 space. Joint letting agents are DTRE, Glenny and Savills.

Equation Properties and BentallGreenOak has the Zenith 105 scheme on Ealing Road in Alperton. The

104,605ft2 development consists of a single unit comprising 14,693 ft2 of office space and

89,912ft2 of warehouse space. It has 12m eaves as well as 4 dock and three level loading doors. Joint agents are CBRE and Knight Frank.

Ferranti says: “Many of these new buildings are already under offer and there is not much

coming forward.”Colleague Rosso agrees: “Speculative development

is limited. It is causing problems and rent levels are continually growing.”

Indeed, rent levels are up 33% year on year according to CBRE’s latest research hitting £22 per ft2 in the M25 West area.

Rents in Park Royal are at £30 perft2 with Hayes in the mid 20s according to Colliers where Ferranti says th company has seen rents across all sizes and grade increasing 13% to th end of 2021 increasing to 16% on an annual basis.

Savills director Dominic Whitfield warns: “It is going to be tough in short and medium term for occupiers until there is more of strategic review regarding land supply round the M25 to service the burgeoning London population.” ■

Interest rate rises and build cost inflation will make it cost more to build the same product and ultimately that means it has to come off the price of land.John Bell, managing partner, Glenny

85% of 22 units under

construction totalling 3.57 million ft2 are based in the South

East (Source; Savills)

Savills latest Big Sheds Briefing notes that over one third of available space in the Southeast and London is Grade C.

Director Toby Green says: “We have seen a shift in the quality balance of the available stock as low-quality Grade C units return to the market.”

Currently 35% of the available space is Grade C, 6% is Grade B and the remaining 59% is Grade A space.

Green says: “A large proportion of the Grade C space should be earmarked for redevelopment or refurbished as they do not reach the ESG standards expected by many occupiers.”

That being said some 12% of stock taken up in the year to date has been classified as Grade C stock.

Some of the stock while being old is still viable especially to those operators looking for short term throughput rather than storage.

There is roughly one million ft2 of second-hand space – not all Grade C and just shy of that again as new speculative space according to CBRE’s latest research.

Downgraded


BEHIND THE SHED32


2022 EVENTS

1st & 2nd November Robotics and Automation 2022CBS Arena, Coventry

This two-day event is a must for businesses seeking the latest and next-generation robotics and automation technologies.www.roboticsandautomation.co.uk

8th NovemberSupply Chain Excellence AwardsHilton on Park Lane, London

The Supply Chain Excellence Awards are the industry’s most revered prizes and in 2022 celebrate 26 years. Click below to see how you can enter.www.supplychainexcellenceawards.com

28th & 29th MarchIntraLogisteX 2023NEC, Birmingham

IntraLogisteX is completely free and will be packed with everything practitioners need to improve productivity, safety, maximise space and cut costs. IntraLogisteX is for logistics professionals who are looking for solutions to their current and future challenges, from the latest materials handling technologies to full-scale warehouse automation options. This event is designed for end-user practitioner logistics professionals such as warehouse managers, heads of distribution, IT directors and lead project managers.www.intralogistex.co.uk

5th December 2022The Top 50 Logistics Service Providers 2022The Top 50 Logistics Service Providers 2022 is a ranking of the UK’s top 3PLs and 4PLs will be published on 5th December 2022. This will coincide with a series of online broadcasts from 5th December to 9th December which will reveal the Top 50 and feature interviews from the industry’s most respected CEOs and thought leaders.

REVERSE LOGISTICSFive ways to greener reverse logistics; sustainability’s next frontier

MATERIALS HANDLINGThe future of sortation and conveyor systems in order fulfilment

ROBOTICS IN THE WAREHOUSEFind out what’s new in robotic operations in the warehouse

SEP

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60 million stepsThe One Million Step Challenge is a fundraising event organised by Diabetes UK. Between 1st July to 30th September, staff from Palletways UK and across the membership will walk more than 10,000 steps every day to hit the milestone, while raising funds that will take Diabetes UK closer to its vision of a world where diabetes can do no harm. Participants will walk in their local area, at their own pace, and together the Palletways team aims to raise more than £10,000 for the charity. Over the next three months, more than 60 employees from Palletways UK, part of Imperial Logistics (Imperial), and its members will each take on one million steps.

Let them growHGVC has become the first HGV training specialist to announce carbon neutral training. So far, more than 1,500 trees have been planted – one for every HGVC training course ordered since the beginning of its partnership with THG. Each tree planted as part of this agreement absorbs around 0.3 tonnes of carbon-dioxide (CO2), with each HGVC training courses generating less than 0.1 tonne (approximately 82kg on average) of CO2. As such, HGVC will be operating in carbon-negative way, helping to eliminate more CO2 than it produces. In addition, these trees will enhance natural spaces and create new habitats for wildlife, increasing biodiversity and pollinators.

Don’t forget Ukraine Howard Tenens Logistics has recently embarked on another journey to transport humanitarian aid to Ukraine in order to support those in the ongoing crisis. With the support of donated goods from Childs Farm, UPN and Organix, a trailer full of resources was successfully transported to Ukraine’s border by two volunteer HGV Drivers from Howard Tenens Logistics. The goods were given to volunteers at the arrival site for onward distribution. “The situation facing the Ukrainian People is horrific, with people’s lives left devastated,” said Jamie Hartles, CEO at Howard Tenens Logistics.

Feed those kidsAs if schools in this country need help from a charity to feed children but I guess that’s what happens when austerity remains king for several years…. MCKS Charitable Foundation UK provides schools across the country with support for food, toiletries, and sanitary products by sending a weekly delivery to stock up their pantry cupboards. The charity currently supports 16 schools across the country and aims to increase this to 100 within 12 months. Each school cupboard supports around 25 families a week and has become a vital life line for children and their families. The Charity’s Chairman Les Flitcroft says that “our charity is dedicated to providing caring and compassionate support and our school pantry cupboards provide an efficient way to get food and supplies directly to children who need them most”.

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