What Brexit means for UK logistics - and how to course correct your warehouse

21 August 2017 / by Gavin Clark, Commercial Director for Snapfulfil

Although an official Brexit may be two years away, warehousing and logistics executives are already considering the ramifications of the UK’s departure from the European Union – and the impact potential changes in immigration may have on warehouse employment. 

Perhaps the biggest unknown in the equation is labour availability. In a soft Brexit scenario, the UK is likely to retain the current policy of allowing EU citizens to migrate freely in and out of its borders. A hard Brexit may mean the UK forms new restrictions on immigration. 

The Brexit vote may already be impacting UK immigration. According to The Guardian, 25,000 fewer immigrants have entered the UK from eastern Europe in the last year, while 16,000 more eastern Europeans have left. In all, net migration to the UK has dropped by 84,000 since the Brexit vote. As these EU nationals leave, qualified labour becomes scarcer. 

Assuming the migration trend continues, all businesses will have to do more with a smaller labour pool. With 15% of the total workforce being Eastern European, the warehousing sector will be amongst the hardest hit. Luckily, technology allows warehouses to mitigate the effect of the looming labour shortage by increasing efficiency in two areas: labour productivity and warehouse design. 

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Labour productivity 

Labour shortages aren’t a new issue for U.K. employers. According to the Chartered Institute of Personnel and Development, 56 percent of companies had difficulty filling vacancies in Spring 2017, up from 40 percent in Autumn 2015. Higher levels of migration post-Brexit, however, could exacerbate the problem. CIPD reports the number of EU citizens holding U.K. jobs dropped by 20,000 between Winter 2016 and Spring 2017. 

To address this changing labour landscape, operators can turn to warehouse IT upgrades to improve productivity and do more with the same, or less, resources. For example, following its implementation of the Snapfulfil Cloud WMS, online furniture retailer, The Cotswold Company has not only reduced its overtime bill by 30%, but also succeeded in keeping head count proportionately stable despite a threefold increase in volumes. 

The best warehouse management software also provides the ability to see at a glance the typical time taken to fulfil a certain number of orders and more importantly, the type of these orders (single item, multi item or bulk) based on historical data. 

Such capabilities are crucial during peak season, helping companies to accurately forecast what additional resources will be required to meet increased demand.

Warehouse design 

Productive employees can go a long way to helping warehouses maintain the status quo, but a technology-driven warehouse can take productivity to the next level through optimal use of the available space.

WMS software uses receiving, shipping and inventory data to determine an optimal warehouse layout, reducing travel times and further optimising operational efficiency. It also can alleviate reverse logistics burdens, helping owners efficiently process, handle and place return stock. 

The extent to which warehousing will change post-Brexit remains in flux. No matter what happens, however, technology can help retailers soften any blows. Consider how efficient your warehouse is now and where you’d like to be – then, look at how a warehouse management system can fill in any labour gaps that may come up.

 

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