The approach of Christmas means warehouses will be extremely busy stocking and moving consumer goods, with the shopping season producing high demand and requiring that suppliers have plenty of storage from which they can distribute the items to stores so that they in turn can keep on filling their shelves.
In recent years, it has not just been high street stores requiring stock as the expansion of e-Commerce has meant the growth of services by which consumers purchase online and receive packages in the post after despatch from distribution centres.
However, while patterns of distribution and logistics have changed, some factors may be of deep concern to those involved in running warehouses, as there are limits to what can be done about them.
A prime example is if items are imported, as any problems with shipping or other issues that prevent the goods from coming to the UK mean that there can be severe problems in meeting demand. For example, between 2020 and 2023, the automotive and electronics industries were hit by a semiconductor shortage that impacted both markets.
However, in some cases, extra warehouse racking can provide more capacity and enable firms to pre-empt potential problems by getting extra stock in, which can protect against any upcoming shortages.
A potential threat could come from increased disruption of shipping using the Red Sea and Suez Canal. The Ever Given incident in 2021, when a huge cargo vessel got stuck in the Canal for several days, showed just how much disruption could be caused as other ships either backed up behind it or took the longer route around the Cape of Good Hope.
This route has also been subject to more regular problems from pirates operating from the Horn of Africa, especially Somalia, as well as Houthi rebels in Yemen. The latter intensified attacks on shipping earlier this year, with a focus on vessels aligned with countries seen as allies of Israel as the Gaza war continues.
In the latter case, the situation could be about to get worse, as Reuters has reported that the Houthis and Russia have held talks in Tehran about a deal that will see Russian anti-ship missiles being supplied to the rebels to attack ships in the Red Sea.
It is believed these missiles could be supplied in retaliation to the possible use of Western missiles by Ukraine. Should this happen, the danger and disruption could see significant delays in imported goods reaching the UK and other European destinations, with potential stock shortages as a result just as Christmas approaches.
Another possible problem could come if there is a major flare-up in Covid infections as immunity wanes and hospitalisation rates increase amid the growth of the XEC strain, apparently more transmissible than previous Omicron strains.
While another lockdown is almost unthinkable, at least some people may be wary of going out, or too ill to do so if they catch it, both of which would mean more shoppers switching from high street shopping to online purchases.
This won’t make warehouses serving physical stores busier (quite the opposite), but will put extra pressure on facilities serving the e-commerce sector.
Quite simply, those stocking up for Christmas may find patterns of supply and demand are not what they expect, which is why it makes sense to add extra racking and get more stock in early.
