Shortages leave warehouse industry ‘creaking at seams

A critical shortage of warehouse space risks causing yet further delays to Christmas stock already threatened by a growing backlog at UK container ports and a lack of lorry drivers, businesses have warned. Warehouse operators reported that the industry was “creaking at the seams” and said companies were running “dangerously” low on time to be ready for the busiest period of the year.

- BEN CHAPMAN

The lack of space has been compounded by a drastic shortage of warehouse workers, with firms competing to fill thousands of vacancies. Staff are being offered pay rises of as much as 30 per cent, the costs of which are expected to be passed on to customers because margins in the logistics industry are so tight. The wage increases come on top of a more than fivefold jump in the cost of shipping a container of goods from China.

Shoppers are being advised to expect longer delivery times, higher prices and less choice as a result.

Warehouses have filled up rapidly thanks to a boom in online shopping during the pandemic, while businesses have responded to the chaos in global supply chains by building up stocks, putting further pressure on limited space.

Industry leaders say that a cumbersome planning system means they cannot build new warehouse space fast enough to keep up with demand.

In addition, shipping firms have been hit by gridlock this week at the UK’s biggest container port, Felixstowe, in Suffolk, where a lack of lorry drivers has resulted in goods piling up in warehouses.

“Ports are able to move boxes and load and unload vessels; the problem is moving goods on and off the port,” said Tim Morris, chief executive of the Major Ports Group. “We are having to very carefully manage storage space. Problems start when that fills up.”

Businesses face long waits to move their goods out of ports and have been forced to divert goods to Rotterdam and other European logistics hubs. Smaller vessels are then chartered to take goods into the UK.