Current Challenges in Logistics and Consumer Supply Chains
COVID-19 has severely shaken up the logistics industry in the UK. Mass transit systems were disrupted as movement between major cities was restricted to contain the spread of the virus.
While the UK Department for Transport ensured that supply chains for essential goods were not disrupted, fluctuating demand for goods created pressure on food and other consumer goods retailers and warehouses.
We look at the impact of COVID-19 on logistics businesses in the UK and how they are dealing with the crisis.
Pressure on Warehouses
COVID-19 has thrown manufacturing, trading and storage businesses into disarray. Demand for non-essential items dropped within weeks, and warehouses ran out of space to store newly arriving products that were in the pipeline.
Many warehouse operators had to rent out additional space to store client goods. In many cases, these short-term storage locations were acquired at a higher rental cost, which increased the cost for operators.
The facilities had to be refurbished to meet standard operating procedures for COVID-19. The staff had to follow adequate social distancing measures, ensure temperature testing and hand sanitizers were supplied at all stations. Contact between workers was reduced and there was a greater emphasis on machine handling for cargo.
A logistics industry report suggests that the demand for warehouse space is expected to exceed supply during 2020. Online retailers’ ability to make deliveries to customers will come under sustained pressure due to a shortage of logistics warehouse space.
The report further notes that the volume of storage stock will exceed the available logistics warehouse space in the country by 25m sq ft per warehouse by the end of 2020.
A Time of Uncertainty
Although supply chain operators have adjusted to the shifting market demand so far, many businesses are worried that the worst is yet to come. Business surveys show that twice as many logistics companies are worried about the impact of COVID-19 on their operations than the number of firms that were concerned about Brexit.
Businesses involved in non-essential goods supply have been hit the worst. Clothing, fashion and shoe retailers are the ones that have had to use the most warehousing space, yet sales are not guaranteed even if stores re-open.
Managers are unsure how long it will take for demand to get back to pre-COVID-19 levels. While the cost of storage keeps going up, a lack of sales can force many businesses to shut down permanently.
This is a troubling scenario for warehouse operators. The financial instability of their clients puts additional pressure on their logistics operators working with SME retail and manufacturing businesses.
Equipment and Staff Shortages
Another major challenge faced by delivery and storage companies is the shortage of Personal Protective Equipment (PPE) for their workers. Delivery drivers and couriers, in particular, are concerned about coming into contact with the virus as they make their rounds door to door to fulfil orders.
Companies have come up with curb-side delivery, which reduces the risk of getting infected. Most delivery businesses have adopted this technique to limit human contact. However, it still does not compensate for the lack of PPE.
Lastly, the logistics industry faces the problem of employee absenteeism and lack of delivery personnel. Retailers and logistics businesses have seen an upsurge in online delivery orders, and they have been hiring drivers at a premium to fulfil orders.
Despite facing numerous challenges due to COVID-19, logistics businesses continue to adapt and keep the supply chains going to meet customer demands. LogistCompare works with many logistics and warehousing businesses across the UK that offer advanced warehousing and distribution services for client businesses.
If you would like to work with a storage and delivery business in your area, get in touch with our support team to find out more .