Space: the final frontier for same-day delivery
The demand for fast online delivery is changing the configuration of warehousing needed, says Steve Purvis, operations director at Bis Henderson Space.
Next-day delivery is no longer seen as fast enough and, for retailers, those who offer a same-day service are increasingly winning competitive advantage.
The traditional model of distribution in the UK, run from a national distribution centre in the midlands, is well suited to replenishing high street stores and, in combination with express carriers, can provide efficient next-day delivery across the country. However, for a same-day service that model breaks-down as stock needs to be held much closer to the customer – and for many retailers establishing that network may be a challenge.
Finding adequate warehouse space of the right size, in the right location, through an estate agent is difficult and normally requires a business to commit to a lengthy lease of 5-10 years. This is a significant and unnecessary risk for any business trying out an unproven strategy.
Likewise, choosing to work with a third-party logistics provider involves risk too. Contract length here is likely to be three years or more, includes their sizeable operating margin and the availability of warehouse space in the right area depends on their business commitments, and that may not suit your business’ best interests.
Considering that the capacity of the stock holding point need not be vast, no doubt just providing for a limited SKU range of fast movers or items on special promotion, other simpler options must be available, where reward need not be outweighed by risk.
In fact, there is a third way – one that offers flexibility, proximity and capacity at minimum risk and cost.
Businesses across the country have underutilised warehouse capacity and a great many are searching for ways to put those resources to work. The opportunity for collaboration is far and wide. Many warehouse users have excellent facilities, cutting-edge IT, and a highly motivated workforce with a low ratio of full-time staff to agency operatives.
Working through Bis Henderson Space, with its wide portfolio of ‘own account’ properties and competitively priced 3PL spare capacity, there is a far higher likelihood of achieving a flexible deal – perhaps just for 6 – 12 or 18 months – at a well-suited location.
