This year is unique in both its uncertainty and its behavioural shifts. However, one thing seems certain - there will be a surge in online shopping as we approach the festive season. Couple this with the social distancing restrictions of Covid-19 and the increased inventory required by many businesses in case of a ‘no deal’ Brexit, and we almost have a perfect storm.
Less rental fleet available
Whilst the Chancellor is mulling over multi billion tax cuts to stimulate the economy, companies are cutting back on capital investment and, at best, freezing head count. Warehouse and logistics operators are used to planning for seasonal peaks, often bringing in rental fleet and temporary workers to manage the extra demand. Nevertheless, 2020 will prove far more unpredictable as the UK’s rental companies attempt to boost liquidity by cutting back on fleet investment.
The shift to online shopping is unequivocal. The online share of retail spending has increased by around 10% this year, peaking at nearly a third of all shopping in May. Covid-19 has expedited a shift in our shopping habits that was already happening and looks likely to be sustained
Black Friday predictions
Last year, in the face of a post-Christmas Brexit, Black Friday saw extraordinary levels of shopping. Economic uncertainty may dampen overall levels of spend this year. Nonetheless, shoppers’ dread of the inevitable cold, dark winter queues outdoors means that Christmas 2020 and its Cyber Monday lead up is set to break all records for online shopping.
The pressure is on
So, the pressure is already building for warehouses to meet demand. Even into January, where the level of returns can exceed 10 per cent of overall sales (a £60bn industry), logistics operators will need to remain on the ball.
Can the sector cope
The question is, can the warehousing sector cope with this perfect storm scenario? It probably means there will be winners and losers. At worst, some may fall by the wayside as Covid finance repayments, Brexit-related stock availability issues and a sluggish Q2/3 take their toll. At best, high demand levels coupled with lack of availability of rental fleet may mean that some won’t be able to maintain handling efficiency.
Whether you are an OEM supplying rental equipment or a fleet operator, you need to plan ahead to ensure your fleet can keep up with demand.
Ordering in good time
Ordering rental equipment in good time will mean that you have enough MHE resources to cope with the unpredictable surges in demand generated by Black Friday, Cyber Monday and the Christmas sales season.
Of course, if there is less short-term rental equipment available to meet demand, rates may go up. So, this extra cost will need to be factored into your plans.
Power vs fleet availability
Another way to look at maintaining handling efficiency is to consider power requirements rather than fleet size. The ability of your fleet to meet the handing demand at your facility is a simple relationship between the number of units in your fleet and the power available to drive that fleet:
Handling Efficiency (HE) = Fleet size (FS) x Power availability (PA)
Of course, today battery power prevails in the warehouse. Given that most warehouse fleets use lead-acid batteries, up to a third of the available handling capacity of your fleet is reduced in each 24-hour shift due to batteries being on charge.
Buy in rental batteries
Yet, a typical warehousing operation of say 10 trucks can double its handling efficiency without increasing its fleet size. This is achieved simply by hiring in additional batteries and chargers. An additional seven batteries could increase handling capacity by 100 per cent at a cost of less than £2000 over two months.
One stop solution
Needless to say,, such ambitious figures can only be achieved by thinking holistically. The batteries and chargers would need to be fast-charging. But the charging facility itself would need to be streamlined. Any chance of the battery changing area getting clogged up with traffic or delays would reduce efficiency significantly.
Therefore, a good battery rental solution would have to include the whole battery bay. The most flexible and adaptable logistics operators simply keep a space available in their facility and, each year, hire in the roller beds, racking, chargers and batteries they need.
Make the move to lithium
A more radical solution would be to convert all or part of your fleet to lithium. Most fleet users are not aware that this choice does not have to involve investment in new fleet. Solutions like Hoppecke’s trak | powerpack lion, which is a modular lithium-ion energy system, can be installed in industrial trucks designed to take lead-acid batteries with no requirement for vehicle-specific adjustments.
The high charging current facilitates continuous vehicle operation with only a 30-minute intermediate charge. This means a significant increase in materials handling efficiency because equipment is performing optimally without the need for spare batteries and charger systems.
As well as longer service life, these batteries can be stored for at least six months with no risk of deep discharge. In addition, operational costs are reduced because of the energy savings achievable with lithium batteries.
Long term change
It goes without saying that Covid-19 has profoundly affected the warehousing and logistics industry. But by anticipating and planning for the resulting operational changes, fleet managers can make sure they benefit from the new normal.
Post-lockdown we’re facing a new set of business challenges. Fortunately, there are several ways to maximise existing materials handling assets to enhance productivity whilst keeping costs under control. We can help your business emerge from the shadow of Covid-19 and get back on track. Call us now on 01782 667306.