Nottingham Logistics 2021: The Boom Continues?

Nottingham Logistics 2021: The Boom Continues?

Unless you’ve been living in a cave (which hasn’t seemed like such a bad lockdown option at times), you’ll have noticed the huge rise in the number of couriers, trucks and hauliers on Nottingham’s roads. The pandemic drove unprecedented demand for online shopping and saw ecommerce account for 31% of all retails sales by the end of 2020 – up 11% according to the Office for National Statistics’ (ONS) figures. All these goods need to be delivered and this has led to a commensurate rise in demand for logistics services – including a spike in the number of requests for courier and truck insurance quotes. Nottingham’s 41,000-strong logistics team have never busier and business owners large and small thrived.

But was 2020 a flash in the pan or will the ‘new normal’ herald a new era for what is a vital industry for the Nottinghamshire economy? In this latest blog from Coversure Nottingham – Nottingham’s leading independent commercial insurance brokers – we’ll look at what 2021 holds for the sector. We’ll look at what it means for commercial landlords, for local employment, traditional retailers, at the changes the haulage industry will need to go through to make this surge sustainable and see whether 2021 will see the logistics boom continue.

Commercial Landlords

While logistics is about moving goods it’s also about storing them. Increasingly consumers want the convenience of online shopping with the immediacy of traditional retailing. Next day delivery, once a premium service, has become the norm and to satisfy this need retailers and delivery firms have had to invest in regional storage hubs. Leading courier firms like Hermes have poured millions locally into new warehousing. The rise in demand has been such that they opened their Panettoni Park operation a month early. In January Clowes Developments announced the commencement of Phase 1 of Forbes Park in Long Eaton, which, when completed, will consist of seven new trade counter and warehouse units totalling 28,095 square feet of logistics space.

The hunt for development land is back on, only this time it isn’t for residential city space, it’s for commercial land with easy access to the M1, the A1, the airport and the railway. This is helping to change the outlook of many landlords. While residential landlords are still enjoying strong demand owing to a shortage of homes in Nottingham, falling demand for office and retail space is making commercial property owners look elsewhere for returns. With online shopping set to account for over 40% of all retail by 2023 and with Brexit forcing firms to stockpile goods in the UK, it looks like this could be a good bet.

Employment

With the courier sector alone having grown by 23% in 2020 and with predictions from Mintel that it will become a £21bn business by 2024, jobs, like goods, are on the way. Having a long-established logistics industry, this bodes well for the Nottingham job market. The opening of the new Hermes hub created an extra 100 positions and with similar facilities on the way there’ll be more of where that came from.

Courier work is something that fits in well with many people’s lives. The rise of the part-time ‘lifestyle courier’ as part of the gig economy is particularly attractive to younger people who use it support their burgeoning careers in the arts, media, or creative sectors. Given our city’s demographics, this looks like a marriage made in heaven.

Of course, the move from High Street to online shopping comes at a price. The CBI have reported that retail job losses are at their highest level since the crash of 2008 and predict worse is to come, alas. Many have used furlough and other government measures to keep their businesses on life support in the hope of a post-COVID return to normality in Nottingham. But with more and more businesses moving to remote working permanently, a decline in footfall is likely to become permanent. All we can hope is that this will mean a shift in employment patterns rather than an overall decline.

Nottingham Retail: Clicks And (No) Mortar?

So, what is the future for Nottingham’s retailers? Even pre-pandemic things weren’t great. Over the past few years, we’ve seen a clutch of household names close their doors with brands like Debenhams, Mothercare and Top Shop all going. As far back as 2012 the BBC reported that Nottingham had the highest number of empty shops in the UK, and today 183 stand empty.

When ecommerce first hit in the late 1990s, retailers were exhorted to adopt a ‘clicks and mortar’ approach of an on and offline store. Over time the mortar part of this equation has been gradually eaten away. Crippling business rates, rising rents and falling footfall have made life all-but impossible. Throw in the grenade that is COVID, which has cost 30,000 pub and restaurant jobs to go, and this beleaguered sector’s future looks bleak.
There is hope, however. An American Express survey in September 2020 found that there had been a 68% increase in sentiment towards local businesses during the pandemic with local retailers scoring particularly well. Service levels, convenience and human interaction were all cited as reasons for this, so maybe there is light at the end of the tunnel. Change is required though. Retailers large and small need to provide an ‘experience’, focus on personal service, and offer speedy, local same-day deliveries. Do that and they can still beat their online competitors at their own game.

EVs and Green Logistics

Having everything delivered is fantastically convenient but there’s a price to be paid – and it’s not one that’s added at the online checkout. The environment. Having thousands of extra diesel-powered trucks and vans on our roads contributes significantly to our carbon footprint and further pollutes our air. As we have noted before in this blog, Nottingham has a pollution problem and it cannot be allowed to get worse simply so we can have an Amazon delivery. Emissions need to be cut and cut fast. Poor air quality is now at crisis levels with more than 40,000 – 1 in 19 – UK deaths associated with it according to Air Quality News.

The industry has taken note and between higher taxes on diesel from central government on high polluting vehicles, the threat of Clean Air Zones (CAZ) from local councils and vehicle manufacturers investing billions in developing electric vehicles (EVs) things are changing. Amazon recently announced their intention to put 10,000 EVs on the road by 2022 and other big delivery firms, notably the Post Office, UPS and DHL are following suit.
Even truck and haulage firms are getting in on the green logistics act. Tesla, Daimler, Ford, and DAF all have models on the market and many more are expected in the coming years. Given that trucks contribute 30% to all road traffic CO2 emissions (a number that’s still rising) and that electric trucks can cut emissions by up to 40%, this must be the way forward. Yes, there are concerns around range, but Tesla’s Semi can already do 300 miles on a charge and as batteries get better so this shouldn’t be a long-term problem.

Nottingham Logistics 2021: The Boom Continues?

It seems certain that COVID will leave a legacy that will change the way we live, work and shop. The home delivery boom started in the early 2000s and the pandemic has forced the pace of change in terms of businesses offering more flexible working arrangements which has added further impetus. As with all changes, there will be winners and losers and in this case the logistics industry looks like it’s holding a set of aces. The challenge will be to grasp this opportunity while adapting to the demands of a green economy, something it seems determined to do. For a sector that is so important to Nottingham’s economic wellbeing, this looks like another delivery of good news.

Like Some Truck or Courier Insurance Help?

If you’d like some help saving money on your truck or courier insurance, then please call the Coversure Nottingham team on (0115) 837 5592 or email Coversure Nottingham.

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