Freight News, Logistics

Warehouse shortage holds back economic recovery

[ May 15, 2014   //   Chris ]

A chronic lack of readily available, large-scale warehousing could hamper the UK’s economic recovery, says managing director of Rhenus’ UK operation, according to David Williams.

With an ever-increasing Europe-wide network of own operated distribution hubs, the freight forwarder is seeking centrally located warehousing facilities over 100,000 sq ft, but has found very few available. A severe shortage of operational distribution centres may well prevent foreign businesses from establishing a presence in the UK, forcing them to establish job-creating logistics hubs elsewhere, he warns.

Williams, said: “We are currently searching for a major warehouse location for a well-known European brand, but have found only one potentially suitable location within the whole Midlands region. Granted, there are several design and build options, but these would take at least 18 months to develop to an operational level. Most of our customers are looking for fully operational facilities within a maximum six month timeframe and this paucity of warehousing could significantly hamper growth.”

While there is no immediate solution to this short-term challenge, Williams is concerned that developers have the most appropriate access to finance that enables them to build warehousing prospectively. “Clearly, we can’t magic 150,000 sq ft warehouses out of thin air, so we need to build suitable stock as soon as possible. However, without the right access to affordable finance, developers simply won’t take the risk. It would therefore be sensible to see investors and developers working together more closely to ensure vital warehouse stock is constructed as soon as possible.”

Tags: David Williams, Rhenus