A Look at 2021 Six Months In

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Adam Jones, our Managing Director comments on 2021 so far and what’s still to come.

We’re halfway through 2021 and what a whirlwind it has been.

At CFG towers there has been much activity. You know all about our acquisitions and growth earlier this year, and we’ve been out and about recently searching for additional warehouses to add to our portfolio and support our growing customer base.

But whilst we’ve been developing our business, we’ve also kept a very close eye on what’s been happening across the supply chain and logistics sector. Its buoyancy and unpredictability remain a focus for everyone who works in the industry.

The online shopping boom has driven a huge demand for warehousing space, a driver shortage is threatening to hinder supply chains and the delivery of goods compromised with Brexit challenges and posed challenges for many. Throw in a pandemic too and patting ourselves on the back as an industry is perhaps what’s really needed!

At the launch of a  recent report  by Logistics UK Elizabeth de Jong, Logistics UK’s Policy Director commented;

“The logistics industry has proved invaluable to the UK economy throughout the COVID-19 pandemic, with businesses across all modes of freight transport taking quick action to adapt their operations to meet the needs of consumers.  However, a reduction in supply of international shipping containers, and ships to carry them, led to significant rises to the cost of moving goods and services internationally; by the end of 2020, shipping container rates had increased by 185% year-on-year and air freight costs rose significantly when cargo space was constrained due to the grounding of passenger flights.  Fuel prices collapsed at the start of the pandemic but have now recovered to pre-Covid-19 levels.  This reduction may have helped to offset inflation in the short term, but rates charged for all modes of transport are expected to rise in 2021, which could drive increased prices across the economy.”

Whilst challenges are expected to lie ahead for some time yet, we expect the second half of the year to bring many positives for our industry too.

We expect demand for warehouse space to continue to grow as we enter the peak period for extra stock, both in store and for ecommerce. From about the middle of August we normally see a spike in demand for our services and this year should be no different. Indeed, predictions say that supply chain and import issues could see the festive shopping frenzy brought forward as people plan ahead and make sure they have secured the items they want.

Presuming that restrictions are lifted in full shortly and that the country remains open, unlocked and ‘back to normal’ then the ‘freedom’ element will also kick in and drive demand up in sectors that have been closed or quieter such as the hospitality and entertainment sectors.

However, all these factors combined will contribute to a massive demand for warehouse space and a rise in costs for that space. By the industry continuing to work together we can continue to tackle whatever is thrown at us. We must be adaptable, resilient, and positive.

Our view is that a stable marketplace is still some way off. But experience has shown that we are resilient and well prepared to manage the requirement of our customers; those who work with us now, and those who are yet to join us.

Should you wish to talk to us about how we can support your warehousing and 3PL requirements please get in touch with our Business Development Manager, Alistair Plant –Alistair.plant@carltonforestgroup.com