Logistics predictions, by Phil Shepley, Vice President and Head of Commercial UK and Ireland at Iron Mountain.
The key challenges for the warehouse and logistics industry in 2024 fall into three categories – modernising operations, sustainability, and workforce disruptions.
Supply chain disruptions, from global events to geopolitical shifts and natural disasters to public health crises, can impact the flow of goods, leading to disruptions. The UK continues to have strong demand for high quality warehouse space. However, the resultant higher rents and longer leases are putting strain on balance sheets. Warehouse as a Service (WaaS) can support modernisation more flexibly.
We think 2024 will see heightened demand for WaaS, supporting end users to modernise their supply chain operations. Businesses will prioritise agile supply chains, leading to an increased adoption of WaaS to adapt to changing market conditions. WaaS offers a flexible and cost-efficient alternative to owning and managing warehouses.
The tightening energy performance standards on new and leased buildings will see occupiers modernising their estates, at the risk of being served huge fines. While retrofit activity will drive a significant number of efficiencies, the demand for new spaces built to modern standards will rise. The sustainable nature of the warehouse of the future will be another important consideration. Providers will need to support customers to achieve their net zero goals.
EPC changes will drive customers to demand higher standards from their suppliers to ensure requirements are met ahead of deadlines.
Automation and AI improve safety and increase efficiency in warehouse operations. It alleviates the workforce shortages the industry faces, however cost and flexibility are still a barrier for many companies. The warehouse and logistics sector will continue to face challenges around attracting and retaining talent in key roles. Combined with the continued impact of legislation and global events impacting labour availability, organisations may need to contend with shortages.