Analysis: Is the wind in the right direction for Amazon to snap up Atlas Air?
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The growth of Amazon in the UK has had a huge effect on the demand-supply balance of available warehouse capacity, delegates at this week’s Multimodal event in Birmingham heard.
According to Mark Thornton, marketing director of omnichannel and e-commerce technology provider Maginus, Amazon’s current UK profile of 13 fulfilment centres and 22 delivery stations will be boosted by an additional one million square feet of warehousing this year.
He said: “In 2016, 25% of the available warehouse space in the country was taken up by Amazon, which led to a 71% reduction in total available space in the UK – and that has had an obvious effect on the market: rents have increased for everyone, and in some places they have gone up by as much as 20%.”
In addition, Amazon’s increased warehouse needs have led to a steep growth in demand for warehouse workers, with a consequent drain on the availability of labour.
“The labour pool is one of the big issues,” admitted John Eynon, managing director of Southampton-headquartered Import Services.
But he added: “Although we had an Amazon warehouse open across the road from us and it had no effect. But in general terms, keeping your staff happy is a major priority.”
Amazon also remains one of Import Services’ largest customers – last year alone it shipped goods to 51 Amazon distribution centres in the UK and mainland Europe.
Asked what working for Amazon was like, Mr Eynon replied: “Amazon can be difficult to talk to, but once you are inside the skin of the system it isn’t such a bad place. To be honest, I don’t find them more or less difficult than any other retailer.
“It is also important to remember is that Amazon is not the biggest retailer by any means. It is still only half the size of Wal-mart. But what it has done is raise the expectation of the consumer, although there are still plenty of opportunities for other retailers.”
That expectation has also placed an onus on 3PLs working for the e-commerce giant to maintain high service standards themselves.
Mr Eynon was dismissive of the potential challenges posed by disruptive technologies such as Uber Rush – an on-demand delivery service that connects shared economy couriers with businesses and individuals.
“It’s very easy to get a cheap courier – what you need is a good quality point of delivery, and I’m not sure I would trust Uber with that.”