Warehouses operated by manufacturing and automotive firms have increased by 43% © Monty Rakusen/Getty Images
Warehouses operated by manufacturing and automotive firms have increased by 43% © Monty Rakusen/Getty Images

Total warehousing space grows by 32% amid 'seismic shift'

Will Green is news editor of Supply Management
21 June 2021

There has been a 32% rise in the number of UK warehousing units over the past six years, according to a report.

The report, commissioned by the UK Warehousing Association (UKWA) and compiled by Savills, said in 2015 there was 428m sq ft of space used for storage and distribution but in 2021 this figure rocketed to 566m sq ft – a rise of 138m sq ft (32%).

Over the period the average size of a unit has also increased, from 217,000 sq ft in 2015 to 340,000 sq ft in 2020. The average height of eaves has risen from 11 metres to 14 metres.

In 2015 just over 1,500 individual warehouse units were identified and over six years 444 warehouses have been added to the list.

The report said the increase had been driven by a “seismic shift” that involved a massive acceleration in e-commerce and home delivery, while “Brexit and the global pandemic have driven and amplified the core changes”.

Nina Bomberg, director global indirect purchasing at SEG Automotive, makers of starter motors and electrical components, recently said the company was stockpiling more in response to pandemic disruption.

Speaking at the CIPS Global Conference, she said: “We have moved from not having any stock to having a certain amount of days’ stock, in some cases even weeks. We said we will spend money here because we will save it in ridiculous logistics costs in the end.”

She said the automotive value chain was not set up to hold inventory but this had to be re-evaluated.

“It’s just steel and plastic and copper. We can stick this on a shelf for a month, it’s not going to perish,” she said.

“We just don’t have the warehouses nor does this value chain have the cash to be honest. Just-in-time went into the automotive industry decades ago and that is how it is financed, by the fact it doesn’t keep stock.”

The report said third-party logistics and transport now accounted for most warehouse use, followed by high street retail, food retail, online retail, manufacturing, food service, and automotive.

Warehouses operated by manufacturing and automotive companies increased by 43% over the study period to account for 64m sq ft of the total.

The report said for every additional £1bn spent online, a further 775,000 sq ft of warehouse space was needed to meet new demand.

“[Warehousing] will be even more in the spotlight as the global economy recovers from Covid-19 and shoppers continue to spend online, while manufacturers look to store more inventory closer to home to avoid the supply chain disruption that has been experienced in more recent times,” said the report.

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