Thursday, March 8, 2018

Logistics Conference Concentrates a Host of Current Issues as Warehouse Keepers Meet

UKWA 2018 Event a Resounding Success
Shipping News Feature
UK – As can be seen by our photograph the fairer sex was well represented at this week's United Kingdom Warehouse Association (UKWA) Annual Conference, the last day coinciding with International Women's Day. This two day event however presented something for everyone with 10 hours of lectures from 25 expert speakers, all with something to say that was valid to working in today's logistics environment.

Subjects ranged far and wide but the theme of this year’s event was ‘Adapting for Success in an Unpredictable World’ and, sure enough, the topics covered gave a concise illustration of not only the current situation, but looked ahead, à la the Ghost of Christmas Future, to what might be, in a range of fields from data security to the changing face of retail and the impact on the gathered warehouse keepers, a body which, when the square footage they jointly hold is calculated, represented a very sizeable chunk of the country’s storage capability.

The Conference opened with an introduction from UKWA Chief Executive, Peter Ward, pictured amongst the ladies, who commented on the unprecedented rate of change which is occurring in the industry, coupled with the geopolitical shift that has seen some radical changes, some anticipated and others which could never have been foreseen. This was backed up by a short video highlighting some of the major events which have occurred recently, a film in fact that was so well received, it was shown on the morning of the second day again by popular request.

The UKWA CEO pointed out the opposing tactics of East and West as, whilst China was investing $900 billion in its ‘Belt and Road’ initiative to enable it to export Asian goods more effectively to the West, in America we see the President taking an opposite tack, imposing restrictions on imports which threaten home producers. Ward explained that, having discussed the possibilities with freight industry colleagues, there was a fear of a potential post Brexit jump in customs declarations from 90 million to 300 million per annum, with a corresponding cost of at least £4.5 billion, plus a similar dramatic increase in customs examinations with an equally punitive consequent price tag.

An intense look at the global economics factors which affect those far beyond the confines of the world of freight, came from Walter Boetcher, Senior Economist at Colliers International whose talk gave a snapshot of both current and potential future trends for subjects ranging from retail price balancing and sensitivity, to the effect of Brexit so far on financial institutions, plus the possibilities for both UK mortgage rates and for recession in the US by the mid 2020’s.

Whilst Boetcher opined that VAT presents the largest challenge of Brexit this broader topic, the ‘Elephant in the Room’ as listed on the agenda, was comprehensively discussed by a range of speakers with some worrying potential outcomes under examination. Lesley Batchelor OBE, the Director General of the Institute of Export & International Trade, followed by Barbara Scott of Customs Associates, analysed the balance of trade between the UK and EU, emphasised the impact of an imperfect deal and painted a picture of how individual traders might prepare despite the lack of any details of a firm agreement at this stage. The conclusion? Register for AEO status, despite the split with the EU, any UK system is likely to mirror that of its neighbours notwithstanding the fact that it is likely to be subject to some changes.

The views of the HMRC came from Tom Parry Jones who outlined the Tax and Cross Border Trade Bill which is currently passing through the required Parliamentary hoops. He confirmed that a new Customs Code will ape EU policy and that the government has set out tactics for four possible scenarios of the ongoing negotiations. These included both streamlined models and less palatable alternatives. The points covered ranged over hard borders but ‘with facilitations to ameliorate trade’ and the pre arrival processing of documentation. Again there was talk of mutual recognition of AEO and AEOC schemes.

Pierre Liguori of Tokema gave the European perspective, telling how areas such as Haute de France were keen to attract UK logistics related businesses, and then a panel discussion answered delegate’s questions. Free Trade Zones warranted a mention but with Brexit of course uncertainty reigns supreme and any answers tended to be opinions rather than certainties.

There followed some talks on the HMRC’s new Fulfilment House Due Diligence Scheme, which it appears is likely to be as complex as it sounds. Appropriately for a day on which the EU has once more insisted that the UK must pay £2 billion for VAT it has failed to collect for Chinese textiles on which the tax has been avoided, this scheme is HMRC’s great idea on how to solve a specific problem. In future a warehouse keeper or logistics company which has control over goods which have emanated from outside the EU will be held directly responsible for any wrongdoing, underpayment of tax, goods not as declared etc.

It appears that the customs authorities will hold the operator, the ‘Fulfilment House’, responsible for such anomalies and will expect that the goods are not only fully inspected and quantities and type confirmed, but that these inspections are ‘diligent’, ensuring quantity, quality and type are checked and properly recorded and the records, together with customs entry details, kept for 6 years. There is a full suite of penalties for transgression right up to £10,000 per offence for non-compliance.

This physical confirmation of goods of course goes directly against the traditional responsibility of a freight agent who is expected never to interfere with items in his or her care unless there is a suspicion of wrongdoing. With the security packaging now prevalent on many imported items, particularly electronic goods, such interference will not be welcomed by customers or suppliers.

A profile of the real estate market followed which included trends past and present and a particularly interesting talk from Tim Ward, Managing Director of Chetwoods which included an explanation of the potential of the Well Line, the mysterious underground postal link which runs beneath the London Street stretching 6 miles from Whitechapel to Paddington. Chetwoods have undertaken a feasibility study on the potential future use of the line which we will go into further into a future article.

Urban deliveries were a hot topic at the Conference, talk of urban delivery centres came up time and again and the next forum discussion touched on these before analysing evolving warehouse design and fit out. The savings made by lighting and insulation are now well known but the reduction in costs for some logistics outfits has been frankly staggering since the introduction of controlled led lighting technologies from companies such as Luxonic, whose Mike Preston offered up some interesting figures.

The importance of benchmarking was next up followed by a run down on the new General Data Protection Regulations, due to become mandatory in May and which will directly affect virtually any British company - you have been warned! Megan Dunmore of DDPR was in the hot seat for that one, explaining that giving a customer to opt out of things like sales emails was no longer satisfactory, now you have to get their agreement to opt in. Designed to stop all that unwanted spam, the general opinion was it will make little difference, most of the really annoying rubbish that arrives coming for territories overseas with no respect for either EU or UK laws.

The second day of the event concentrated on three main topics. The changing face of retail, described appropriately by John Munnelly from John Lewis’s vast Magna Park complex who covered ‘contingent labour’ and associated problems and who pointed out that 65% of logistics have retail connotations, Lucas Dawe from food specialist GIST on that sector, topical after ‘ChickenGate’, then Adam Jones from Arrow XL the ‘two person’ delivery specialists followed illustrating his company’s business model.

Second topic was addressing the skills shortage, something regular readers will know we have been covering for some months and which it is hoped is now being addressed by both the government and the commercial sector, and finally a catch up on where we are with automation and how integrated technology training is a major factor often neglected when new systems are introduced.

Altogether then an interesting, if exhausting event, concentrating a wide range of essential subjects into a couple of days at a time when it has never been more important to stay abreast of what is indeed an ‘Unpredictable World’.