Friday, 10 August 2018

Time to kill warehouse diesel forklifts

 Only recently it has been made clear that warehouse operators using diesel forklifts could be sued by their former employees over a variety of cancers, especially lung and bladder cancers, which were reclassified by the World Health Organisation as Class 1 carcinogens, meaning that there is no doubt that exposure to diesel fumes at the workplace, like warehouses, is a killer. But now more alarming news has emerged from a study by Queen Mary University of London,* which shows that people living near busy main roads have dangerously swollen hearts, similar to those seen in the early stages of heart failure. While people with such enlargement may not feel ill they are, nevertheless, at greater risk of heart attacks and other problems caused by airborne pollution in the bloodstream.

The biggest source of air pollution is traffic and of particular concern are the sub 2.5 micron oily particulates emitted by diesel engines, which lodge permanently in the bloodstream and whose anti- pollution devices like soot filters cannot eradicate. Operators of warehouse diesel forklifts have long known the risk from diesel engines and are under a legal obligation to make the workplace safe. Internally, air extractors help and over recent years the diesel engine makers have made great strides to clean up their emissions but the problem of PM 2.5 particulates remains and may well be insoluble.

All responsible warehouse operators now considering renewals of their forklift fleets have an effective, safe alternative, namely electric forklifts. One of the main reasons why diesel was preferred over electric, i.e. greater performance in all weathers, no longer applies, thanks to big advances in  battery and charger technologies that can deliver a performance the equal of diesel in all weathers. Add to that their other advantages, like low noise levels and compliance with hygiene levels in sensitive environments like food and pharma, and the motive power choice becomes a no brainer.

 Michael Gove, Britain's Secretary of State for the Environment, has announced a target of banning all new petrol and diesel vehicles by 2040, while other EU countries are setting more ambitious targets. The question is can users of warehouse diesel forklifts afford to wait that long, given the potential threat of lawsuits. That, too, is a no brainer. Insurance companies might also like to concentrate their minds with pre-emptive action, like hiking premiums for diesel trucks or withdrawing cover entirely.
*The study shows that diesels are the biggest sources of the two main pollutants measured in the study of heart structures and air quality. One of their key findings is that heart enlargement correlates closely with NO2 and particulate pollution levels, even when those levels are well within British guidelines, part of which, dealing with particulates, are more than twice as high as those set by the WHO.

Monday, 30 April 2018

Why Sainsbury and Asda grocery merger should be blocked

Dark prospects for supply chain partners

The proposed £12 billion merger between Britain's Sainsbury and Asda grocery chains is not only a sign of competition desperation but poses undeniably bad news for both the public, in terms of diminished competition, and the hapless supply chains who have suffered years of unfair bullying practices at the hands of the four grocery behemoths, which will be cut to three unless the Competition and Markets Authority (CMA) blocks the deal. But can the CMA, now seemingly a toothless tiger following its approval of the Tesco-Booker merger, be trusted to put the consumers' interests first and why should the deal be blocked?

For many years the four big UK grocery chains, Tesco, Sainsbury, Asda and Morrison, have controlled over 70% of the UK grocery market which offered little by way of meaningful price competition, and a hard time for their suppliers grappling with up to 60 different, odious ploys to squeeze the last drop from them. Some of these ploys were sheer chutzpah while others were downright fraud, like the "Drop and drive" deliveries, whereby the retailers claimed goods never arrived and refused to pay for them, setting back 20 suppliers alone with £15 million in losses. Yet other wheezes bordered on blackmail. But then came two disrupters to give the big retailers nightmares, something I warned about in print 30 years ago, the rise of foreign, deep discounters and the disintermediating effect of online shopping.

In just a few short years the German discounters, Aldi and Lidl, have seen their share of the UK market soar from near nowhere to 12.6% of the total market, which has come at the expense of the big four. The big four know why the discounters can undercut them on price, typically up to 30%, but their big problem is that they cannot emulate the discounters' business model without huge disruptions to their own business models. The real reasons, therefore, behind this proposed Sainsbury-Asda merger are to buy market share through mergers and then make efficiency gains to slash costs, since they cannot easily buy the discounters as they are family owned. If the proposed merger goes through it will have nearly a third of the entire market, pushing Tesco's 27% market share into second place. But the synergy savings from the merger cannot be said to be anywhere near enough to lower prices enough to compete with the discounters.

The big four grocers are in a bind now that price is king in a cash-strapped market. The Albatross around their necks is their legacy of huge superstores trying to sell anything and everything under one roof, which carries a huge inventory cost. A typical Tesco superstore would stock up to 40,000 SKUs compared with only 1,600 for a discounter, which means much of Tesco's stocks are slow movers, whereas for the discounters they are all fast, and if they become slow they are mercilessly dropped. The cost of holding inventory can dwarf all other warehouse costs combined. When Tesco's founder, Sir Jack Cohen, proclaimed "Pile 'em high and flog 'em cheap" it was a workable business model but in those days SKUs were far fewer. Today, a more accurate mantra would be: "Pile 'em high, flog 'em cheap and flog 'em FAST."

So, then, if there is nothing in it for the consumers to benefit from the merger what will it be like for suppliers? Perhaps ASDA itself shows the way. Struggling as Britain's third largest food retailer, it was named last year as the worst of the UK's major supermarkets in the treatment of its suppliers. About 12% of the suppliers said ASDA rarely or never complied with the Grocery Supplier Code of Practice. With behaviour like that it is hardly surprising that Britain's Shadow Business Secretary, Rebecca Long-Bailey, called for the CMA to examine the combination of Sainsbury and Asda "as a matter of urgency" because of its potential impact on suppliers. There is no reason to expect that shabby supplier treatment will get any better and every reason to suppose it will worsen. Adverse competition and supplier consequences, therefore, should make it imperative to block this merger bid. Failure to do so would show the MCA as unfit for purpose and worthy of dissolution.


Sunday, 29 April 2018

Warehouse LEDs may pose higher cancer risks

Nowhere in industry, perhaps, has the adoption of LED lighting been more dramatic over a few years than in warehouses, which now accounts for most of the new light fittings in them, but is there a health peril that could come back to haunt warehouse operators unless remedial action is taken soon?

The cause behind the remarkable switch away from earlier lighting technologies like fluorescents and metal halide to LEDs is a no brainer. Although initially more costly than other lighting sources, LEDs are up to 30% more energy efficient, have a far longer life, mean much lower maintenance costs, offer a better colour rendition, and are eminently suited to smart sensors. All this means that ROIs are remarkably short, less than two years.

The latest, potentially disturbing health news, however, came in respect of research into street LED lighting in Spain, where scientists believe that they have found evidence of a "strong link" between Britain's new generation of street lighting and two common forms of cancer --- breast and prostate. In regards to prostate cancer the belief is that heavy exposure to LEDs doubles the risk, while raising it 1.5 times for breast cancer. There is, as yet, no proof of a causal link, but the scientists believe that the "blue light" emitted by LEDs may disrupt the body's circadian rhythm, which in turn affects hormone levels, and both prostate and breast cancers are hormone-related.  

For some years the medical profession has expressed concern that white LEDs may be emitting too much blue light which may affect vision and sleep owing to blue light suppressing melatonin, a chemical that controls the body clock. The advice from the American Medical Association recommends reducing the blue wave lengths.

 Blue light is a range of the visible light spectrum emitted by most white LEDs and so warehouse operators should check on this aspect to see if any remedial action can be taken. It is a problem that also affects mobile 'phones, tablets and TV screens. Research into the problem so far has been limited, because LEDs are a relatively new technology, at least in terms of its recent, widespread adoption. If it can be proved soon that the blue light exposure is carcinogenic but no action was taken afterwards to remedy the problem then long-term warehouse workers affected by those common cancers or damaged eyesight would be able to bring legal actions for high damages.

This kind of threat has already emerged in respect of long-term exposure to diesel fumes inside warehouses, following the WHO reclassification of diesel fumes in the workplace as a class 1 carcinogen, meaning that it definitely causes lung and bladder cancer. Given that there is now no longer an excuse for using diesel forklifts inside warehouses, even if they are fitted with cats and soot filters, their future indoor use could lead to future law suits from stricken warehouse workers.

Thursday, 4 January 2018

New summit to tackle urban logistics crises

The United Kingdom Warehousing Association (UKWA) is sponsoring a new, one-day summit: "Feeding Cities Summit," to be held at London's British Museum on February 6th as a direct response to the new National Infrastructure Commission (NIC) study on the future of the UK freight industry, announced in the last Chancellor of the Exchequer's budget. Britain's cities, particularly London, face serious urban logistics challenges that if not addressed soon could lead to a shortage of essential food supplies on shelves. Given that other cities around the world are finding urban logistics a growing challenge, this summit's findings would be of interest to them.

At the summit will be key industry stakeholders to review the challenges of urban logistics, gather all the documented evidence and, most importantly, to develop a coherent plan going forward to present to the NIC. All attendees will receive access to key research and organisations, including a free copy of UKWA's report: "Feeding London 2030 -- facing the logistical challenge." UKWA will use feedback collected from delegates at the event to develop a series of recommendations to present to the NIC ahead of the NIC's in-depth study on the future of freight, announced recently by the Chancellor, Philip Hammond.

Delegates at the summit will consider what is best practice in urban food service and local convenience grocery logistics, discuss the challenges of current infrastructure and get an insight as to how the warehouses of the future might look, while exploring the role of technology, such as artificial intelligence, driverless vehicles and drones in shaping the urban supply chain models of tomorrow.

In the UKWA report, "Feeding London 2030," there were stark warnings about the looming urban logistics crises brought on by a variety of factors like the trends in the way food and drinks are bought and consumed, which added to the capital's changing population profile and the transport infrastructure that is already creaking, are bringing significant challenges to food and drinks manufacturers, wholesalers, retailers, caterers and transport logistics companies.

To give readers an idea of the pressing need for change, the report focussed on 125 food outlets in London's Greenwich, where one restaurant could typically have 13 deliveries a day. Such a distribution pattern has repercussions far beyond food and drinks supply logistics. One of the major irritants, for example, is the daily exceeding of London's air pollution legal limits by an alarming margin, sometimes by as much as 13 times, and given that 80% of such pollution is ascribed to road transport it is the leading culprit sending an estimated 9,000 Londoners to an early grave every year and leaving many thousands more with serious, costly pulmonary diseases which is putting the National Health Service under serious strain.

Tickets for the summit cost £395 plus VAT and further details can be had from:

Sunday, 31 December 2017

Can robot usage be made ethical?

Automation in the warehouse has been on-going since the 1970s but only recently has the scope for robots that can work safely around people sharpened the focus and implications of full robotisation to reveal potentially huge social/ethical issues that could lead to even more inequality unless governments can find a solution.

In January 2015, on this blogsite, under the heading: "Will robots destabilize society?" I referred to the remarks of the Archbishop of Canterbury, Justin Welby, to a Wall Street audience that the rise of robots and gene therapy could allow a tiny elite of the super rich to amass more power while almost everyone else grows poorer. But has that not already largely happened over recent years, like in America where in real terms incomes for most are below 10 years ago while the top 10% saw a real rise, leaving a tiny minority controlling most of America's wealth, a shift helped by legal though morally repugnant tax avoidance schemes based on financial artifice rather than honest business models?

The latest warnings have come from the UK-based Institute for Public Policy Research (IPPR) which suggests that new technology could wipe out jobs generating earnings of £290 billion a year, a third of the British total. This would leave some parts of the country harder hit than the others, like the north-east and Northern Ireland, and certain industries to be hit by job-killing automation would include agriculture, transport, food processing and administration.

The report's authors called for a co-ordinated government response to the economic challenge, with the establishment of a regulator to oversee the "ethical use of robotics and artificial intelligence," while some ministers have spoken airily of creating "jobs of the future" to replace those lost to machines. While the historic pattern of economic development from the industrial revolution may give comfort to those hoping to find new jobs there is one factor in economic history that never existed until now which could dash such hopes, namely the unprecedented growth in job-destroying automation and growing global population.

The IPPR, however, seems sanguine enough to believe that increasing automation has the potential to deliver a boost to UK business to bring "economic plenty" but warned that the change must be properly managed so that the benefits do not remain concentrated in a few investors' hands. It also believed that most jobs would be re-allocated rather than eliminated, while still leaving some people getting a rise while others are trapped in low pay, low productivity sectors. To prevent this it says "the Government should look at ways to spread capital ownership and make sure that everyone benefits from increased automation." Well, don't hold your breath on that one.

There can be no argument that repetitive, unskilled jobs will be taken by robots as their price tags fall and they become smarter and more versatile and nowhere are such jobs so repetitive and low paid than in the warehousing sector. New recruits for this industry, therefore, might like to look elsewhere unless contemplating the more challenging, arcane aspects of logistics, like more efficient control of the global supply chains where, admittedly, this could be rewarding but not suited to the rank and file warehouse workforce.

Tuesday, 27 June 2017

Big retailers still hammering suppliers

For some years the consequences of intensifying competition among big retailers have been visited on their hapless, bullied suppliers but now the decline of the pound Sterling since the Brexit vote has been added to the retailers' bullying techniques and excuses, which number at least 60 odious ploys to squeeze the last drop from suppliers. The latest retail giant to be accused by an anonymous supplier letter is Boots, the retail chemist, now part of the American Wallgreens Boots Alliance, whose UK arm is struggling with faltering sales, leaving it under pressure to cut costs, including the culling of 500 HQ jobs.  

The supplier accused Boots of dictating "draconian" terms to small businesses, but in its defence Boots said it laid out all its terms clearly in agreements with suppliers. Among the exactions allegedly imposed by Boots the supplier claimed Boots levied a 2.5% "prompt payment" charge on all invoices it settled within 106 days. The company seems to have a curious notion of "prompt," given that the norm of invoice settlement should be 30 days. The Federation of Small Businesses said payment times of 75 days or more "cannot be described as prompt, while paying less than the invoice total cannot be described as fair." The supplier also said the chemist chain applied a £300 "non-compliance" charge for "the slightest error in paperwork" or "using the wrong type of pallet."

Going beyond the Boot's experience, it is clear that the major food supermarket retailers, in particular, have still not heeded the lessons from previous supplier bullying complaints, and the worsening extent of their practices will be unveiled by a new survey this year. Struggling Asda, Britain's third largest food retailer, has just been named as the worst of the UK's major supermarkets in its treatment of suppliers. About 12% of the suppliers said Asda rarely or never complied with the Grocery Supply Code of Practice. These chutzpa ploys, when applied across the board, even include implied blackmailing threats which have nothing to do with the small print terms framed by big retailers. One such example is demanding £25,000 for charity dinner tickets run by the retailers with the implied threat that no ticket purchase could mean de-listing of suppliers' products.

As I pointed out in my blog of March 12th, 2017, headed: "Retailers' odious supplier treatments risk disintermediation," if the big retailers fail to behave honourably with their suppliers they could find themselves being bypassed by supplier alliances building their own giant order picking warehouses to supply consumers directly, now that the disruptive technology of online shopping allows that and is growing like a weed. With Amazon now parking its tanks on food retailers lawns the latter should start showing some respect to its suppliers.

Sunday, 9 April 2017

 Diesel forklifts' days numbered?

Has the final call on dirty diesel in the warehouse been made? Warehouse operators have long known that they have a legal responsibility to protect their warehouse staff from the deleterious effects of diesel forklift fumes inside warehouses but only now has it been made clear to them that firms could be sued over cancer long after their staff have left them. IOSH and the Health & Safety Executive have issued recent warnings because diesel fumes have been reclassified as a grade 1 carcinogen, meaning they are a definite cause of cancer. This reclassification by a branch of the World Health Organization came after it found that people exposed to diesel fumes at work were up to 40% more likely to develop lung cancer. In Britain, over 650 people die of lung or bladder cancer following exposure to diesel fumes at work and about 800 new cases of cancer linked to diesel exhaust are registered each year.

The fears of warehouse operators, however, do not necessarily end there because it has been known that diesel exhaust fumes, in particular, are linked to pulmonary diseases like asthma, which costs Britain's national health service (NHS) huge sums in medical treatment every year and the problem is worsening. It is estimated that up to 60,000 British people die prematurely from air pollution, 80% of which is caused by road transport fuel exhausts and about half of all vehicles on the road today are diesel powered. There is no reason, in theory at least, why warehouse operators who have been insouciant over the diesel issue in their warehouses should not be sued for pulmonary diseases, too.

The only way for warehouse operators to ensure that they do not face prosecution from the authorities and have the ass sued off them by employee cancer and other disease victims is to ban all diesel trucks inside their warehouses, and make every reasonable effort to minimise diesel exhausts out in the yard. There are, of course, cleaner alternatives to diesel, especially electric forklifts, and the good news here is that one of the main reasons why diesel was preferred over electric, i.e. greater performance in all weathers, no longer applies thanks to big advances in battery and charger technologies which deliver a performance punch equal with diesel.