London, UK: Cold Chain News took stock of the views of Britain’s top cold store operators in its March issue out 17 March.
Cold store operators commented on rising fuel prices; booming demand for cold storage; demands for higher pay; labour shortages; and the drive to automation. Here’s what they said.
Chiltern Cold Storage
• How are you managing your energy costs at the moment? What affect is it having on your business?
Our business has suffered from an energy price increase of 56% in October 2021. We have implemented an energy surcharge but have managed to reduce this to 19.5% by speeding up cost-saving plans we were implementing.
• Has demand for cold storage increased post-Brexit?
Yes, lots of demand from European companies wanting to store in the UK.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
We have always paid higher than average rates of pay but we are finding it hard to recruit quality staff due to lack of workers in the Peterborough areas.
• Have there been any developments on automation – new warehouse systems etc?
No. but we are planning for a cold store extension at Bourne in 2023.
Reed Boardall
• How are you managing your energy costs at the moment? What affect is it having on your business?
The rise in energy costs is obviously affecting everybody and our sector has been particularly badly hit. Given the volatility of the markets, it makes sense, in the longer term, to look at alternatives to reduce your dependence on the grid, such as CHP, biomass, PV-wind energy etc. With the upward momentum on prices likely to continue, the key at the moment is to manage every cost on a day-by-day basis – we actively control what we consume and cut back wherever possible. We have implemented what energy0saving measures we can, such as installing LED lighting, while maintaining integrity in the cold store.
• Has demand for cold storage increased post-Brexit?
At the moment, the market is giving a false picture – with manufacturers struggling to get the raw materials and labour they need, production is currently lower than normal and, consequently, there is cold store space. However, in the medium term, we expect this capacity to be taken up as full production resumes. Although it is difficult to forecast after two years of such upheaval, looking ahead, we expect to see an increase in available storage with new stores coming into the market, albeit with older ones leaving. This will provide a net gain, however, the demand for storage will rise. We are feeling a lot more positive about the next year and beyond.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
We are all very much aware of the issues around HGV driver availability, and, like most other businesses in cold storage and many other sectors, we have been struggling to find staff in recent months. Labour shortages have had a big impact on pay with moves by some of the major digital companies to attract warehouse staff by offering large joining bonuses. This has worsened the situation for the rest of us and created a false market price. With the shortage of drivers continuing, we are doing what we can to alleviate the problem by introducing our own ‘warehouse to wheels’ programme which provides grass roots training to fledgling drivers. We’ve also brought in more flexibility on hours and are able to tailor shift patterns around the availability of resource.
• Have there been any developments on automation – new warehouse systems etc?
Having set the template for our cold stores a number of years ago and established a successful business, we have stuck with it. We’ve aligned ourselves closely with our technology that will replace people as operators although the stores have become more efficient, for example, with composite panels that provide better insulation, improved compressors etc. In addition, technology in our forklift trucks has become much smarter – they are now far more intuitive as well as providing valuable data.
HSH Coldstores
• How are you managing your energy costs at the moment? What affect is it having on your business?
As a result of the increase in energy costs, we have had to introduce an energy surcharge. The increase in energy costs has had a huge effect on our business.
• Has demand for cold storage increased post-Brexit?
The amount of demand for cold storage has stayed the same as it was before Brexit.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
The availability of employees was better before Brexit.
• Have there been any developments on automation – new warehouse systems etc?
We are currently implementing a new Warehouse Management System and looking at potential ways to automate other processes which are currently carried out manually.
• Any other comments?
We are currently working on the construction of a new 30,000 pallet cold storage facility. We anticipate that this new facility will potentially open in 2023.
NewCold
• How are you managing your energy costs at the moment? What affect is it having on your business?
Forward buying has provided protection from the worst of the year-year impact.
• Has demand for cold storage increased post-Brexit?
Yes in 2021, but it seems to be settling down this year.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
Pay increases of up to 10 % were required to successfully retain staff.
Cold Move
• How are you managing your energy costs at the moment? What affect is it having on your business?
It has had a significant effect on our business, being our number one challenge at present.
• Has demand for cold storage increased post-Brexit?
With the work we currently do, I’m not sure it has. In some cases it has affected it detrimentally, due to work being moved to Europe, as a direct result of factories moving, due to labour shortages, following Eastern Europeans returning to their native country.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
Staffing has always been a challenge in a town where unemployment typically is 0.5-1.2%. Pay will be more of a challenge post April with a large increase in the living wage and other businesses of our type competing for the same small pool of labour.
Culina Logistics/Great Bear
• How are you managing your energy costs at the moment? What affect is it having on your business?
Culina Group uses some fantastic independent experts, who helped the business move to 100% renewable energy in 2021. Clearly the business is not exempt from the exceptional increases and works with both suppliers and customers to ensure that the situation is managed responsibly.
• Has demand for cold storage increased post-Brexit?
Many Culina Group customers are restricted by shelf life in terms of how much inventory they can store without risking an increase in product wastage. The conflict between inventory levels, associated service levels and cost of working capital is one that most businesses face. Following a lot of supply challenges through Brexit, the view would be that service levels have never been more critical for suppliers and this is getting more focus than ever from both supplier and retailer.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
Similar to the rest of the manufacturing and logistics community, Culina Group has seen a significant increase in the demand for quality warehouse, transport and administrative operatives. Culina Group aims to be the employer of choice in each region and constantly reviews the local market to ensure that the business remains in the upper quartile with its broader employment proposition. Culina Group has also invested a lot of time looking at the benefits of working within the business (flexible hours, impressive facilities, employee benefits scheme) and also relies on its industry-leading health and safety record. As long as visa restrictions remain in place, it will continue to be a challenge to recruit high calibre individuals into any organisation – It is no more complicated than “supply and demand”. Thankfully such is the strength and depth of the wider Culina Group, the business remains better positioned than most in the long-term.
• Have there been any developments on automation – new warehouse systems etc?
Culina Group has recently invested in a dedicated automation team. There is no silver bullet, due to the flexibility required in shared-user operations but the technology is moving on at a significant pace and Culina Group want to be well informed of the potential opportunities. The business has always invested heavily in its warehouse and transport management systems and will continue to do so. This is what helps to give Culina Group a competitive edge in terms of both service and cost.
• Any other comments?
It has been a very tough couple of years, but broadly speaking the industry has stepped up to the mark and pulled together to face the challenges.
The Ice Co Storage & Logistics
• How are you managing your energy costs at the moment? What affect is it having on your business?
Working closely with energy suppliers. We have solar panels and wind turbine to source our energy. We deal with Ameresco.
• Has demand for cold storage increased post-Brexit?
No – pre-Brexit a lot of customers stock piled.
•What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
Increased warehouse operatives’ rates.
• Have there been any developments on automation – new warehouse systems etc?
Fully automated racking. Moving MHE to Lithium battery. Installation of individual Store Pods.
Turners (Soham)
• How are you managing your energy costs at the moment? What affect is it having on your business?
Energy prices have seen the need to introduce energy surcharges in a similar way as fuel surcharges on the vehicles. We are using PV energy sources where possible as well as switching to LED lighting.
• Has demand for cold storage increased post-Brexit?
Yes
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
We have seen a general shortage of labour within the warehouse, whether that be full time employed staff or agency staff for covering peak periods. Rates of pay have increased significantly over the last 12 months.
• Have there been any developments on automation – new warehouse systems etc?
The nature of our core work makes automation very difficult due to the customer variances in product specifications and box sizes etc. We are continually monitoring the situation.
Border Cold Stores
How are you managing your energy costs at the moment? What affect is it having on your business?
With energy prices soaring, we are no exception to the financial implications being felt by many businesses & households alike. As well as being far more energy conscious on site, this situation has accelerated plans to invest in renewable technology group wide.
Has demand for cold storage increased post-Brexit?
We’ve experienced a rapid increase in demand for cold storage pre & post Brexit. The pandemic also had a big impact as planned Brexit stock holdings were utilised during this period.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
Very minimal disruption experienced
Buffaload Logistics
• How are you managing your energy costs at the moment? What affect is it having on your business?
We changed our electricity provider in late 2021 and we work closely with it to ensure we pay competitive prices while using only 100% renewable sources. We do expect cost increases, but these will be in line with everyone in our sector.
• Has demand for cold storage increased post-Brexit?
Demand for cold storage has increased, but we don’t feel this is a result of Brexit, rather that there has been a change in consumer behaviour leading to greater volumes, plus we have won contracts.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
There is continuing difficulty finding FLT/PPT trained people although it isn’t possible to say whether this is Brexit-related. In our experience Brexit hasn’t been a reason for warehouse operatives leaving but it has reduced the availability of suitable manpower for additional growth/recruitment.
• Have there been any developments on automation – new warehouse systems etc?
We have brought in a new warehouse management system (Clarus) which will allow us to scan cross-dock pallets. This is a benefit which will optimise handling as loads transit through our depots.
JR Harding & Sons
• How are you managing your energy costs at the moment? What affect is it having on your business?
We replaced high-energy using refrigeration systems with new, more efficient, refrigeration system.
• Has demand for cold storage increased post-Brexit?
Enquiries increased, currently stores are full, no cold storage available.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
No issues
• Have there been any developments on automation – new warehouse systems etc?
Nothing planned.
Savage Haulage
• How are you managing your energy costs at the moment? What affect is it having on your business?
We have found it necessary to introduce an energy surcharge that fluctuates as the cost of electricity does in order to pass it on to customers or likewise take it away if the price decreases again.
• Has demand for cold storage increased post-Brexit?
At the moment we are still seeing an increased demand for our services, this may not be entirely attributable to Brexit, I have started receiving more enquiries lately due to the next phase of Brexit on incoming goods whereby companies established in the EU are finding it necessary to set up a base in the UK to make trade easier.
• What have the implications been post-Brexit on warehouse staff, including forklift drivers? (Pay, availability etc).
We have increased pay to retain our staff and increased benefits such as holiday entitlement for long service. We have struggled with recruiting experienced staff and so have taken on unskilled people and trained them up accordingly, it has also been a challenge to employ unskilled workers too.
•Have there been any developments on automation – new warehouse systems etc?
Not at the moment, being a smaller business this isn’t feasible at this time.
• Any other comments?
Labour shortages in general across the food manufacturing industry has slowed stock coming into store. However, I have managed to fill space with other contracts.
