As the pandemic wanes the Russian invasion of Ukraine brings more problems for the embattled logistics industry.
On-line demand is falling
- The pandemic boom in on-line sales slows as people are allowed to go out to the shops.
- Due to the conflict in Ukraine, UK energy prices are rising at unprecedented levels. Rises of over 50% in April with a further 34% hike forecast for October. This is seriously depleting the buying power of each family, meaning less disposable income for retail or on-line.
- Fuel prices are rising by nearly 30% which means another squeeze on pockets.
- Fuel price rises are also affecting the cost of transporting goods by road, rail, sea, and air. Consequently, more pressure is put on the price of goods in the shops.
Issues directly affecting the industry
- Fuel price hikes are squeezing the margins for logistics companies as not all the costs can be passed on.
- Transcontinental transport disruption.
- Air, road and rail routes are diverted around the conflict zone and take longer and cost more
- Shipping costs a lot more because of the oil price rises.
- Staff shortages because many of the foreign workers went home during covid and have not returned.
- Container back-logs at ports means delays in getting the product in or out
What does this mean in total?
- Logistics is an industry that is being assaulted from many directions and needs to find ways to improve profitability now and into the future.
One of the answers
- Automate the Distribution Centre
Over the last 10 years LiG partners and consultants have led several large projects and led the way in developing a sound methodology to ensure that the key steps are undertaken correctly.
An automation project typically involves eight stages:
- Procurement – vendor selection and contract negotiations
- Mobilisation – managed by a dedicated project team (client personnel, vendors and LiG consultants)
- Design – managed via a series of workshops throughout the process
- Build and commissioning (of DC and the equipment)
- Operation Preparation and training – management structure and controls
- Testing and readiness planning – systems, equipment, and colleagues
- Go Live with cut over management – issues logging, mitigation, and resolution
- Benefits realisation
LiG’s application of this process has delivered successful projects and we’d be delighted to discuss how this process could be applied to your business.
Throughout this difficult time LiG are also able to help with:
- Business Transformation
- Programme and Project Management
- Logistics outsourcing and Tender Management
Call us on 01604 212 440 – we’ll be glad to help.