2021 - Quarter 3 Reflection
2021 has been a rollercoaster of unpredictable highs and lows that have left marks that have still not quite yet healed. From staff furloughs and redundancies, to supply chain issues, to a lack of Government funding support to care for vulnerable families and independent businesses when they needed it most. Coming out the other side, however, 2 doses of Coronavirus vaccine, lifting travel restrictions, and less stringent ruling on social distancing and face masks have all provided the light relief many of us needed. Yet despite these more positive notes, there is still an underlying prediction of a looming Christmas Crisis. Supply chain issues continue to be fuelled by both Brexit and the Pandemic, in addition to concerns surrounding the increasing demand for warehouse space caused by stockpiling and eCommerce consumer preferences shaped by the multiple lockdowns and panic buying. While the UK remains in a delicate balance, SCN reflects on just what 2022 may hold…
Autumn Budget 2021
Rumoured rising fuel prices were the cherry on the cake of a very badly baked year. The knock-on effect would be catastrophic as road fuel is an absolute necessity for so many. However, Chancellor Rishi Sunak announced on 27 October 2021 that the planned fuel duty rise for 2022/23 due in the Autumn Budget has been scrapped for a 12th successive year.
A very welcome initiative, fuel duty will remain at 57.95 pence per litre, staving off the planned 2.8ppl rise. If duty had gone up, RAC data suggests the average price of a litre of petrol could have reached 147p, taking the cost of a tank to over £80, and diesel an eye-watering 150p.
Warehouse Space According to several prestigious commercial estate agents, warehouse demand is continuing to reach an ever-climbing high. Savills conducted research that showed a quarter of all available space in the UK in 2020 was leased by Amazon. In August 2021, they also reported, that to support their move from physical retail to eCommerce, the John Lewis Partnership signed an 11-year deal to lease a 93,000m2 distribution centre in Milton Keynes from Tesco.
In addition to this stark hike in demand for warehouse space, Brexit rulings witnessed the inevitable delays to imports and exports caused by the reintroduction of customs controls at the border between the UK and the EU. This supply-chain disruption has also been a significant factor in increasing retailers' demand for extra storage space as a precautionary measure.
Staffing and Business Continuity
Many UK businesses are still struggling to fill roles across many industries as a result of European Union workers who have returned home because of Brexit and the Covid-19 (Coronavirus) pandemic, in addition to staff self-isolating due to Covid. Subsequently, bonuses for Amazon workers and HGV drivers have been peppering the news.
Combatting the rising demand for goods and the UK's recruitment crisis, in August 2021 Amazon was offering a £1000 starter bonus to new warehouse workers, with no prior experience required. HGV drivers are also in high demand since the fallout from Brexit and the Pandemic, with many haulage companies offering handsome annual packages of up to £40K. A 15K rise from the usual £25K basic salary.
The impact of staff shortages as a direct impact from Covid-19 and Brexit is not isolated to just the warehouse industry and logistics. A Tesco distribution centre based in Avonmouth has been bringing in Welsh day-release prisoners to work as order pickers for their supermarket, in a Bristol supermarket distribution centre.
Resilience over Reaction
If we can only take away one thing from the Pandemic, for those of us lucky enough to have had our lives completely disrupted, it is so important to recognise that our resilience as businesses and individuals has shone through this year. We have adapted and grown using new technologies, we have made business continuity plans to keep staff safe and accommodate social distancing, and we have made 'new normals' after each lockdown to manage our expectations without reaching the end of our limits. So as we reach the end of the 2021 road, we remain hopeful that 2022 will provide a more positive and fruitful year for all.
Plan your next year with Supply Chain Network
Experts in all aspects of warehouse and network design, SCN understands the importance of remaining competitive in a dynamic industry and the critical data analysis required to achieve this.
Specialists in Warehouse Design and Fit-Out, the SCN team can help you reach your facility's fulfilment potential in 2021 and beyond. Visit www.scnuk.com to learn about the work that we do and to ensure you are ready and future-proof your business plans and warehouse design.