Bringing E-commerce Home… in a Plastic Pallet

E-commerce in the UK is growing: manufacturers are progressively leaning towards a more home-grown image and, coupled with the trials of Brexit, this calls for an increase in UK-based distribution centres, along with vaster spaces, an increase in automated processes, and reliable and durable transit packaging.

Recent statistics _[1] show that e-commerce sales, previously sitting at 21.8% of all retail sales, entered 38% in the first lockdown and have now settled down to around 30% — a growth perhaps predictable because of COVID, but showing no sign of slowing. This ever-changing landscape has resulted in a seismic shift in warehousing and distribution models. Retail outlets have responded appropriately, accepting that a far greater online capacity is essential and ploughing money and time into reshaping logistics from a ‘bricks’ into a ‘clicks’ model — investment in UK warehouses totalled £6 billion in the first half of 2021 alone, growth of over 100% when compared to the same period in 2020.

John Lewis, arguably the godfather of retail, recently rented a mega-shed; an impressive building with one million square foot of warehouse space and a pallet capacity of almost 20,000, in reaction to online transactions increasing from 40% to a staggering 60% of their total sales. Soaring demand has also dictated that DHL grows its fulfilment process, a task it has undertaken with enthusiasm; increasing the fulfilment side of its logistics by 150% over the past eight months. This includes a new facility designed specifically to cater for direct-to-consumer shipping, which then offers smaller enterprises the freedom to scale up their own business processes.

A report by independent UK real estate consultancy, Knight Frank, revealed that the recent spike in online sales will create demand for an increased number of mega-sheds to the tune of 30 million square feet of space. This figure which will rise to 92 million by 2024 when the forecast shows online sales accounting for 32% of all retail transactions. This is calculated on the premise that for every billion pounds’ worth of retail sales, 1.36 million square foot of warehouse space is required. This takes into account the need for the proportionately larger space required for online sales when compared to retail; warehouses need to be large enough to hold stock and facilitate returns.

Space isn’t the only factor — what’s the point of an expanse of warehouse floor that doesn’t operate efficiently? Automation is an area in which distribution centres have invested, and for good reason. Automation is a valuable asset in warehousing — an automated storage and retrieval system (AR/RS) could reduce wasted space by up to 85% _[2] and increase operational resilience by negating the need for overtime pay, training, and management, as well as mitigating the cost of sickness, absence, and the inevitability of human error. Automation can reduce the burden of repetitive and labour-intensive work on humans in a warehousing environment, meeting targets deemed demanding when undertaken manually, which increases pick rates and thus productivity. With automation comes another shift — the move towards a more streamlined transit packaging model.

An automated warehouse inevitably calls for an across-the-board uniformity; robotics can’t be trained to detect the inconsistencies that humans can. For example, plastic returnable transit packaging (RTP) is ‘automation friendly’ — its uniform size and weight reduces wear and tear on machinery and, unlike wood pallets, plastic pallets and boxes don’t have nails or splinters, reducing the risk of causing damage to, or jamming, machinery. RTP is undoubtedly the beating heart of warehouse evolution — quietly mitigating human burden by allowing automation to be implemented with ease; reducing the space required to store stock, thus avoiding the need for further investment in expansion; and negating issues caused by wooden pallets, which usually require human intervention.

Cost-saving, space-saving, efficient and sustainable: watch this (warehouse) space for the beautiful relationship unfolding between automation and plastic RTP.

Our experts at Goplasticpallets.com have more than 160 years’ combined experience in matching customers with their perfect RTP solution. Call the team on 01323 744057 or email sales@goplasticpallets.com

1. https://www.statista.com/statistics/285978/e-commerce-share-of-retail-sales-in-the-united-kingdom-uk/
2. Source: Credit Suisse (Equity Research): Industry Primer – Warehouse Automation, 2017