The Warehousing and Storage industry provides its clients with storage facilities for a wide variety of goods. A large proportion of this is general merchandise. However, the industry also offers specialised storage of liquids and gases, agricultural commodities and refrigerated goods, including pharmaceuticals. Industry revenue is expected to grow at a compound annual rate of 5.7% over the five years through 2019-20 to reach £20.1 billion. The industry expanded particularly rapidly from 2014 to 2016 due to strong online expenditure and retail sales growth.
The companies holding the largest market share in the Warehousing & Storage in the UK industry include Amazon UK Services Ltd, DHL Supply Chain Ltd and XPO Supply Chain UK Ltd. Though the industry has rapidly increased its level of automation, it still requires human labour. During peak times for the industry, such as Christmas, companies need to hire seasonal staff to meet the excess demand.
The sector is dominated by jobs in lower occupational groups, including ‘Elementary trades and related occupations’, ‘Process, plant and machine operatives’ and ‘Transport and mobile machine drivers and operatives’. It is also characterised by low pay, which has been exacerbated as the sector shifts from an ‘industrial’ to a ‘service’ sector.
Skills shortages are a key challenge for the sector. The Employer Skills Survey 2017 found that the main causes of hard-to-fill vacancies in the sector were ‘low number of applicants with the required skills’, ‘not enough people interested in doing this type of job’ (particularly for Warehousing), and ‘low number of applicants generally’. Additionally, for Warehousing and storage, ‘computer literacy / basic IT skills’ (36 per cent) and ‘communicating in a foreign language’ (30 per cent) were more commonly mentioned as skills difficult to obtain than for establishments in other parts of the sector.
The warehousing sector has undergone significant change in the past 10 years, driven by the increasing concentration of power in the hand of major retailers, the growth of online retailing, and the pursuit of low-cost business models. New IT, distribution technologies and labour management systems have facilitated a shift to a ‘just in time’ business model where price competitiveness is key.