Skills gap threatens Britain's industrial renaissance

As remarked in a previous report, "Supply chain shifts threaten Asia," there are many hidden costs attached to outsourcing manufacturing to the Far East to serve markets back in the West. These include inflexibility, poor responsiveness from far off factories, poor quality issues, wholesale intellectual property theft, large minimum production runs and Nature's fury which can wreck JIT delivery schedules. Many outsourcers overlooked these significant costs but the biggest oversight, and this is not hindsight, was the threat from rising production and distribution costs which are now beginning to make the Far East a less attractive, if not uneconomic, place to locate. That does not mean that the Far East will fail to attract foreign investment, but rather that it means such foreign investors will concentrate on serving the regional markets instead, given their potential for huge growth.

So just how fast are these production and distribution costs rising and will it mean that UK and European manufacturers face a golden manufacturing opportunity? Since 2003 wages in Thailand have jumped from US$3 a day to $10 a day while shipping costs have risen by 20%, says one British parts supplier for pick-up trucks. Elsewhere in Asia wage rates have been soaring. In China, minimum wages in the provinces have risen by more than 20% in the year to September and the Chinese government has pledged to double workers' average income this decade. According to one American consultancy, if Chinese wage rates rose 30% a year, the renminbi by 5% a year against the dollar, along with freight rates, it would be as cheap to produce in America as in China by 2015. But already certain products can be made in America cheaper than in China. Likewise, in Britain it is already cheaper to produce high-end clothes rather than in places such as China, Bangladesh and India.

There is no doubt that many British companies are bringing back to the UK some or all of their manufacturing side but it is, perhaps, still only a trickle rather than a trend, but many trickles reach their oceans as mighty, raging rivers. That trickle, however, will be effectively dammed if Britain cannot overcome its serious shortage in manufacturing skills, particularly at the hi-tech end. It is thought, for example, that in Britain's West Midlands there will be around 90,000 hard-to-fill manufacturing jobs over the next five years. One French fashion house now makes between 50% and 70% of its entire global production in the UK and would like to make more there but complains that Britain no longer has the skills.

It may come as a surprise to many readers that recent research claims that Britain is producing more manufactured goods than in 1966 when manufacturing employment was at its peak. This is due to survival strategies put in place by manufacturers to mitigate the effects of globalisation. But these successful firms are now concerned about the lack of high-tech skills in the labour market and some are even worried that their businesses many not survive into the next decade owing to their inability to recruit employees with the right expertise.

Closing the skills gap

There is no doubt that if Britain is to take advantage of the golden opportunity for a manufacturing renaissance then the skills gap must be closed. The British Government is fully aware of this and has some laudable initiatives, like the £140 million being pumped into high-value manufacturing and the financial support for its quango, Skills for Logistics. But the fact is that the firms that need the skilled labour do not have the capacity to offer training because they are largely SMEs.* Such training schemes were largely offered by the big firms which have subsequently relocated from the UK. This means that it it clear that much more is needed to encourage apprenticeships and may even require far more spending on school education to make manufacturing more appealing at GCSE and A level. This may require rewarding some schools better than others who can show that they are producing pupils more suited to a manufacturing society than a services economy so that pupils will be guaranteed jobs waiting for them rather than the arts degree graduates for whom the jobs paucity leaves them walking the streets unsuccessfully looking for work. The government may even need to overhaul school education root and branch for there can be no doubt that the level of education attained by many pupils leaving school is abysmal. The current GCSE qualifications attained by British pupils at 16 has been discredited as a dumbkopf version of its predecessor, the GCE O level, and there is far too much reliance on course work.

Such remedies can be very costly for the Government already strapped by a chilly economic climate but there are ways that both Government and the people, in concerted actions, can add billions of pounds to the Exchequer's coffers. Owing to the complexities of global tax laws, many leading corporations take advantage of low tax rate economies and tax havens. There is nothing illegal about this though the argument that such avoidance is profoundly immoral is unassailable. There has been much recent media criticism of American companies, like Google, Amazon and Starbucks, paying little or no tax in Britain where much of their sales and profits arise. One British MP claimed that Google, Amazon and Starbucks paid a UK corporation tax rate of 0.4%, 2.5% and zero respectively, compared with the current UK corporation tax of 25%.

Finding the cash

It will take time to resolve this through normal channels because it calls for international regulation but concerted action by aggrieved consumers could bring far quicker results. If people wish to change odious corporate cultures there is no greater weapon in their hands by far than collective, sustained and focussed boycotts of the offenders' goods and services. It is an irresistible power that is every boardroom management's potential nightmare.

Apart from the multi-billion pound loss to the Treasury through tax avoidance schemes, money which could be well spent preparing Britain for a manufacturing renaissance, there is a more alarming reason why this insidious canker must be lanced, and quickly. As pointed out by one British department store that pays its taxes in full those firms that pay little or no UK corporation tax have an unfair advantage over those who do and in time the vast sums saved on tax avoidance could be reinvested in the businesses so that, all other things being equal, they would out-compete the full tax-paying companies. Eventually, that could leave the Exchequer so short of revenues that much of its social spending would have to be slashed, risking social collapse and anarchy.

Balance of payments remains untamed spectre

Britain now stands at a crossroads presenting a golden opportunity for a more assured, long-term future. The right route must involve a manufacturing renaissance concentrating on the high, value-added products, in particular, but that will never be achieved without the closure of the skills gap. If this opportunity is missed Britain seriously risks raising the spectre that once was a frequent hot political issue -- a balance of payments crisis. The importance of these statistics has faded in recent decades owing to the liberalisation of financial markets that allowed firms and countries to ramp up their borrowings to fill the gap. But the trouble with debts, as the recent turmoil in the PIIGS** members of the EU so painfully shows, is that if the creditors' confidence in the ability of debtors to repay the loans is shattered then financial Armageddon looms.

Britain's fervent espousal of a finance-based economy to the detriment of manufacturing has had a corrosive impact on the balance of payments. In the second quarter of 2012 the UK's balance of payments deficit reached a record £20.8 billion and the deficit on goods reached £28.1 billion, the largest ever recorded. Back in 1950 Britain had more than a third of its labour force in manufacturing and there was a trade surplus in manufactured goods equal to 10% of GDP. That trade surplus has now fallen to a deficit more like 4% of GDP. Is there any wonder that there is a widespread feeling that the country has put too much faith in finance at the expense of manufacturing?

Capital inflows required to finance national trade deficits may stop, possibly abruptly, if there are mounting, imagined currency or default risks. As far as defaults go the imagined has turned to reality for many countries. For Britain, the default risk is lower but not fanciful. With a fair wind and the right moves to rebalance the economy away from a scenario dominated by paper pushers and City pinstripe bookies, Britain faces a once-in-a-lifetime, golden opportunity. It now remains to be seen if the coalition Government has the resolve to steer the right course and carry the nation with it.

*SMEs: small and medium sized companies
**Portugal, Ireland, Italy, Spain, Greece 
---------------------------------------------------------------------------------------------------------------

Unique articulated forklift will save warehouses millions

It may seem pushing the limits of credulity to claim that a newly launched, special kind of forklift delivers instant truck payback and much more by cutting new/altered warehouse building and running costs. But that is just what Translift Bendi* has done with its Mini Bendi pedestrian articulated forklift developed in close cooperation with ASDA, one of Britain's largest food retailers and part of the Walmart group, the world's largest retailer.

There is nothing new about the ability of articulated forklifts to reduce new or redesigned warehouse building and running costs or even eliminate satellite warehouses entirely. What is new, however, is the introduction of forklift operations with pedestrian traffic in a safe way and so save substantial costs that would otherwise be incurred if truck operations were entirely separated from pedestrian workers.

Undeniably, the articulated forklift is by far the most versatile of forklifts thanks to its 220 deg fork mast rotation and large cushion tyres that combine all the virtues of outdoor counterbalance trucks with internal warehouse machines working in very narrow aisles (VNA) down to 1.6 mt wide. Such versatility can substantially cut forklift numbers and avoid costly warehouse expansion. But just how is the Mini Bendi, costing around £20,000, able to help ASDA not only reduce construction costs but also running costs and what are the hard figures?

A typical ASDA store in the UK costs around £10 million to build, and ASDA's Simon Grass, back-of-house development manager, believes the Mini Bendi has saved 0.5%, or £50,000, from the building cost, including £4,000 on sprinklers. As he explains: "Reducing the building costs helps to maintain hardly any cuts in the building panels, therefore no waste. The steel columns are lower, reducing steel tonnage and costs. In terms of the building and how it looks it is now lower and more acceptable when running through the planning procedure. We now have a truck that offers greater flexibility as well as efficiency and productivity benefits compared with other types of handling equipment."

ASDA has hundreds of large superstores in Britain, with more planned, which gives an inkling on the potential for multi-million pound savings that the Mini Bendi can achieve nationally, and far more if marketed globally. As Simon Grass was keen to stress: "It is not just new stores that benefit from the Mini Bendi. When ASDA reviews one of its more established stores within the estate, the Mini Bendi can save significant space, time and money in the back-of-house areas, as ASDA can reduce the capital spend on realigning the warehouse to separate colleagues and forklifts. This is because the Mini Bendi can perform the same tasks as many of the existing reach trucks within the estate. ASDA can simply swap them over and the area becomes pedestrian friendly."

As a business, ASDA constantly looks at ways to separate pedestrian and forklift trucks to minimise the cost of accidental collisions. However, when segregating it would often lead to usage and productivity becoming inefficient, explained Mr Grass, but "We no longer need to compromise."

Owing to the truck's way of working, ASDA can now have pedestrian pick within the same area, permitting the stores to drop and fill effectively. This supports the reduction in the building footprint and thus improves the building's selling efficiency because ASDA can either build a smaller store or increase the selling space. Either way, it makes no difference to the store running costs like rates, possibly rents, and all the utility costs, all of which the Mini Bendi confers for the building's lifetime -- a truly remarkable return from a humble, pedestrian lift truck.
*www.Bendi.co.uk
--------------------------------------------------------------------------------------

Asian quality issues can undermine Western businesses

As explained in my last blog: "Will technology reshape global supply chains," the perils of outsourcing manufacturing or parts supplies to Far Eastern countries are many but, perhaps, none can be worse than poor quality issues that cause their western customers to collapse. The crucial importance of checking quality issues in any Far Eastern supplier when considering outsourcing cannot be overemphasised, as the recent collapse into Administration of the UK company, Manganese Bronze, (MG) vividly shows.

MG makes London's iconic black cab taxis but it struck a deal with its Chinese partner, Geely, in 2006, who took a 20% stake in the company and transferred taxi production to China. The rationale behind the move, as it is for most companies outsourcing to China, was to reduce production costs to compete better on the world markets.

The latest cause of MG's financial embarrassment was the recall of 400 of its London taxis following problems with its power steering. It succeeds a fiasco in 2008 when it was forced to withdraw 5,000 taxis after some burst into flames. Reports claim that the latest fault was caused by a component from an unnamed Chinese supplier, introduced as part of wider moves to cut costs.

There are parallels to this even within Europe when a reputable company switches to a cheaper country within the EU without always informing their customers. One British manufacturer of forklifts, for example, had a reliable relationship with a West German gear box manufacturer who subsequently sought supplies from East Germany where quality issues fell short. The result was the British company spent 10 times as much rectifying problems as it received in compensation from the German supplier. And that does not include any potential sale losses caused by the damage to the truck brand. The incident also damaged the German company as the UK truck producer switched to Italy for its gear box supplies.

It should not be thought that Chinese manufacturing quality is inherently risky. When Japan was recovering from World War 2 the Western perception of its production quality was one of shoddy, cheap products. Today, Japan's quality issues, especially in car production, albeit with a few recent hiccups, is second to none. There is no reason why China should not become a top quality producer but it may need State intervention to hasten the process before too much damage is done. The Chinese authorities should also be more vigorous  in dealing with wholesale intellectual property theft committed by its corporations. Another British forklift producer whose trucks came from Taiwan felt obliged to reshore its production back to Britain because of concerns by its component suppliers who were reluctant to supply because they feared leakage of their product designs to China for copying.

It should be said in fairness to Chinese producers that there are other problems with MG that seem to have contributed to its collapse. MG reportedly tried to secure a £15 million loan from Geely because it stopped sales while investigating the steering fault and so had no income. Geely owns Volvo so such help would not have been too onerous but it may have felt wary about a bailout given the discovery a few weeks earlier of a £3.9 million accounting black hole allegedly connected to the introduction of a new IT system. When its delayed interim results were announced it showed widening losses of £3.6 million for the six months to the end of June and it has made only losses for the last four years. This seems to indicate that despite several years of Chinese production their production costs could not be reduced sufficiently, hardly surprising given strongly rising Chinese wage rates and soaring fuel bills impacting distribution costs. This has salutary lessons for all companies setting up businesses in China supplying customers half way around the world. China is losing its allure because the law of comparative costs in their favour is diminishing.

At one time holding a virtual monopoly in the London black cab taxi market, MG's woes grew as its market share fell when new entrants, like Mercedes, secured successes with its Vito model. Nissan is also about to enter the London cab market. Even so, as many other Western companies have found when outsourcing to the Far East, keeping a handle on quality issues is very difficult and so should be considered carefully as a key determinant when outsourcing.
-----------------------------------------------------------------------------------------

Will technology reshape global supply chains?

There are many forces at work in the global supply chain which are already beginning to reshape global logistics but one which has yet to have any impact is, arguably, changes in productive technology that could undermine the prime reason behind offshoring production to far flung countries ---lower costs, particularly labour rates.

Hitherto, the main reasons forcing a rethink on global supply chains have been concerns over rising costs, both at the production level and in distribution, poor quality, prolonged time to market, wholesale intellectual property theft and natural calamities. The last of these can be disastrous in a world economy geared to JIT (just-in-time) deliveries. There are also political risks but fortunately these have not had any impact so far. They may also be augmented by environmental concerns which lead to some form of taxes because offshoring has boosted carbon emissions. Despite all these risks, global corporations have not been dissuaded from offshoring to cheap labour countries on a significant scale because the law of comparative costs is still in their favour.

That law, however, could be turned against cheap labour countries by advances in technology which will give high wage economies the edge. Already, in some respects, America is cheaper than China in the production stakes and that gap is narrowing. But that trend could be galvanised through the application of robotics that will replace many low wage menial factory tasks.

An interesting example is Rethink Robotics' Baxter robot that can learn any menial assembly line task. It, and doubtless others like it to come, can increase the productivity of US manufacturers and so help them keep business that would otherwise move overseas. Mounted on a gurney, its two arms, five cameras and sonar sensor that detects motion through 360 deg around it, and enough intelligence to learn tasks within an hour, Baxter can work safely beside humans at remarkably low cost owing in part to its low price tag of US$22,000. Based on three years of an 8-hour shift, that is the equivalent of $4 an hour, almost half the minimum wage in Britain. According to Rodney Brooks, Baxter's brainchild, "We are spending hundreds of billions of dollars doing this kind of work in China and we want companies to spend that here, in a way that lets American workers be more productive." Baxter's upgrades will also be free to enable more complex tasks like two-handed manipulation, and early next year the company will release a set of programming instructions so users can create their own tasks and attachments for the machines.

Plausible though this scenario may be, and while it could have some initial impact, it could cause more problems in the long run of a political nature. Cheap labour economies will develop their own capable robotics when they see that their cheap labour no longer makes the law of comparative costs work in their favour. Production costs are important but these can be changed as market forces dictate. What cannot be changed, however is the exposure to natural and political risks and sharp changes in fuel costs and wage rates. Given that universally applied robotics will not give any one country a competitive edge, the more likely scenario to unfold is a trend towards regional manufacturing, with many companies wanting to produce their products as close as possible to their customers. This will have manifold advantages, like minimising the natural and political risks of stretched global supply chains, enhancing the environment, and lowering distribution costs. Given China's and other Asian countries' social problems of burgeoning populations and their growing aspirations, it is to be hoped that any changes in international trade patterns will be managed skilfully to avoid major social upheaval.
-----------------------------------------------------------------------------------

China and Japan's chauvinism threatens global logistics

Once again the global supply chain geared to JIT (just-in-time) deliveries shows just how Asia is a high risk trade partner without a robust recovery plan to sidestep disruption to supplies for western importers. This blog has repeatedly warned of the folly from placing too many eggs in one supply chain basket. The Japanese tsunami in 2011 and the Thailand floods showed just how nature alone can cripple global supply chains. As if that were not enough we now have the political risks surrounding the disputed, uninhabited islands known as Senkaku to the Japanese and Diaoyu to the Chinese in the East China Sea. Readers should not be surprised that Asian politics is threatening the global supply chains. In my blog of April 25, 2011, headed: "Japan's earthquake must force JIT supply changes," I warned: "Nature, it should be said, is not the only threat to the supply chain. There are also significant political risks."

Japanese factories produce about 40% of the world's electronic components, and in some cases is the only source of supply for items like parts for jet engines. China's Guangdong province provides 80% of the world's basic electronic components and is the largest source of rare earths, so essential for electronic devices. This shows how vulnerable the world is to any political upheaval in this region.

Japan and China, the second and third largest economies with an estimated £218 billion trade relationship, have been a 21st century success story but that success could be seriously set back by the current dispute over typhoon-lashed, uninhabited islands.

Inflamed feelings in both China and Japan, whipped up by a jingoistic media with Government connivance, has already caused considerable economic damage. Japanese businesses in China have been ransacked and closed down. Japanese car makers in China have ceased production following calls for a Chinese boycott of their cars, leading to estimated losses of £154 million so far. The Organisation for Economic Cooperation and Development is so worried by the flare up that they believe it is making the world economy more fragile than at any time since the 2008 financial crisis.

It is difficult to discern what is really behind the flare up over five small islands. Historically, China has the stronger claim that stretches back to imperial times, long before Japan forcibly annexed the islands in 1895. Geographically, the islands are also much nearer China (about 150 miles) compared with over 600 miles to mainland Japan. There are believed to be valuable natural resources like gas but if this is the motive for militaristic passions then is should not be difficult for both governments to reach agreement on development of the islands' surrounding resources by mutual consent and share the revenues equally.

America could help here by hinting to Japan that it will not honour the US-Japan security treaty if Japan is attacked by China around the disputed islands and only come to its aid if mainland Japan is threatened. America right now needs a Pacific war entanglement like a dose of the plague. Its economy is in an unholy mess built on an appetite for unsustainable debt, fanned by rampant banking greed and military spending supporting world-wide bases and numerous military entanglements.

As always, trade is the hand-maiden of prosperity and the surest guarantor of peace. Both Asia and the world have too much tied up in trade interdependence for that to be jeopardised over a few barren rocks. And Japan, in particular, should recall the words of General MacArthur at the dawn of the Atomic Age when taking the Japanese surrender in Tokyo Bay: "It must be of the spirit if the flesh is to survive."

Logistics skills training neglect costs billions

Logistics skills training has a poor image in the United Kingdom even though Britain ranks highly in the world league for logistics efficiency so why is an industry worth £74 billion a year employing one in twelve of the workforce regarded almost with disdain and what does it mean for the rest of the world?

In my blog: "Lousy logistics wastes billions" (May 5, 2010) I referred to the waste caused by inappropriate materials handling hardware and software in the supply chain. Globally, the annual waste undeniably runs into billions of  pounds and is typified by the wrong type of forklifts for the job, ignorance of slick warehouse management systems (WMS) with good stock forecasting programs and lack of double-deck lorries which could reduce the £25 billion a year losses caused by road congestion. And that is only a just a few of the problems. But nowhere did I mention how the right kind of logistics skills training could transform logistics efficiency even more which is so necessary to slash the waste.

At a London press conference on September 12, the Skills for Logistics (SfL), tasked by the UK Government to tackle the skills and productivity needs of employers in the logistics sector, the issue of training neglect was laid bare. Mike Jacksons, CEO of SfL, remarked that " over years training has been dire but it's improving. Too often you get people making buying decisions that are nothing like as good as they should be." As if to emphasise that, Paul Brooks, director of Unipart Logistics, added: "The operations managers are generally poor procurers of skills development. This gives a clue to why the right logistics hardware and software are not being used as much as they should be.

The logistics industry image is still perceived to be poor and so cited by SfL as one of four barriers to better development. Many, if not most, jobs are only four hours a day, three days a week, "so what we have to offer here is full time jobs," says Mr Jackson. Many jobs also involve night work or work in cold temperatures. At entry level the financial rewards are also unimpressive.

While there should be incentives to encourage promotion within all ranks it seems there is inadequate support to taking on new, logistics-savvy recruits at graduate level. These recruits might be young and 'wet behind the ears' but they are likely, through their holistic logistics training, to effect change within a company more quickly. Any such changes which improve the bottom line would mean more in the pot to share among all logistics employees and so cement their loyalty.

Just how much skills matter can be gauged by one company's experience. Gist is a sizeable UK logistics services provider employing 5,000 on 53 sites in the UK and mainland Europe. By taking logistics skills training to heart it has seen a 6% improvement in fuel consumption, 33% fall in employee accidents and a 35% cut in low grade vehicle damage. There has been a 20% fall in employer liability claims, a 22% rise in productivity, a 26% cut in absenteeism and a 36% fall in labour turnover. These savings far exceed the extra costs for training and given Britain's high position in the global logistics efficiency stakes the scope for savings elsewhere in the world is probably immense. Adequate logistics skills training is a win, win, win situation. It makes the logistics service providers more profitable, it keeps their customers' costs from rising uncomfortably fast and it helps the environment in so many ways.
-------------------------------------------------------------------------------------------

Carbon challenge will drive warehousing's future

Challenging times lie ahead for the road haulage industry which will see the logistics map of Britain change almost beyond recognition. That, at least, seemed to be the message from the 20th one-day seminar on "Improving Business Performance," organizied by the Road Haulage Association (RHA) for its members and hosted by Toyota Material Handing UK at its Leicester premises on June 19.

Road hauliers no longer work in splendid isolation from the warehousing function as many now operate their own distribution centres and undertake storage and handling functions once performed by manufacturers, importers and retailers. It is, therefore, crucial to know where they will be not just next year but 10-30 years ahead. Should they, for example, consider relocating to port centric locations with rail-embedded models or setting up LDCs to reduce final delivery distances, and what must they do to be seen as carbon angels?

Phil Harrison, director of LCP Consulting, tried to answer that in his thoughtful talk on "The Future of Warehousing." His key message was that carbon was the big, long-term challenge and that conventional solutions, would not be enough. In short, "The future for warehousing will be driven by the carbon challenge," epitomised by local 'carbon' sites using electric delivery trucks within a 20-mile radius instead of the current 60 miles based on ic engine trucks.

Industry rides virtuous circle

Mr Harrison had plenty of pointers to back his thesis which suggests the industry is riding a virtuous circle, starting with centralisation. This has seen a trend to fewer and bigger sites to the point where tonne/km are no longer growing with GDP. In 1984 a 38,000 mt2 warehouse was considered big but in 2008 a 100,000 mt2 site was unremarkable. The trend has also been upwards, from an average storage height of 6 mt to 14 mt.

Pleasing to any road haulier's ears was Mr Harrison's examples of what the virtuous circle could mean going out to 2050. He believes that Britain's road share of freight tonne/km will fall from 65% to 50% (not so pleasing, perhaps) but that the percentage of truck kilometres run empty will fall from the current 27% to 17%. The average weight-based load factor he sees as rising from 59% to 70%. The 'Green' camp will also be pleased, as the projections are for a 40% improvement in energy efficiency and a 30% cut in the carbon content of the energy.

But container terminals, in particular, can already do much better than that. At the world's most automated container port in Hamburg, 84 AGVs (automated guided vehicles) source their annual needs of 50 million kw from entirely renewable sources. Using this carbon neutral electricity has cut the whole terminal's carbon footprint by around 60% but there is more good news to come. Demag Cranes have developed all electric container handling AGVs that will completely eliminate local CO2 emissions. They will run for 17 hours on one battery charge thanks to the battery power train being twice as efficient as a diesel-electric one.

The drive to minimise carbon emissions, is not, of course just about preventing catastrophic climate change. It is also about the importance of preserving healthy lives. In Europe's northern countries around 50,000 people die prematurely owing to air pollution caused by cargo ships. That is why by 2015 all cargo ships in the English Channel, North Sea and Baltic must reduce the sulphur content of their fuel by 90%.

Future structures are already emerging to support Harrison's views. These include rail-embedded centres to manage in-bound flows and port centric locations. There are already city hubs aggregating the last 25 km and shared user hubs and services sites, regional mini distribution centres (DCs) and hubs.

Container growth will spur property changes

Some of Harrison' s views were supported by Jon Sleeman's paper on "Goods Transport Trends." Jon is a director, research, at Jones Lang LaSalle. These trends are driving activity in the property sector and in particular the envisaged strong growth in container traffic will see growing demand for port centric logistics. Forecasts show a 182% increase in container traffic between 2005 and 2030, from 7 million to 20 million TEU per annum.

Port centric logistics has the potential to provide more efficient logistics solutions by eliminating many return empty container trips. They also enable maritime containers to by fully loaded and they reduce transport costs and carbon emissions. The PCLs may challenge the 'golden triangle' national distribution model.

Online shopping will also shape the property market. E-commerce has hitherto been served by national fulfilment centres within reach of the main parcel hubs to enable late cut-off times to be offered to customers. But food retailers are moving away from vans using local supermarkets to make home deliveries and are now setting up specialist food retail fulfilment centres because sales volumes have risen sharply. This has implications for higher sales of automated warehouse equipment. Such E-fulfilment centres could challenge the existing map of UK warehousing by increasing demand from centres within, or on the edge, of major urban areas. Rail freight growth projections, if achieved, will also affect the property market. There is increasing interest from retailers and manufacturers for rail-connected sites.

In conclusion, Mr Sleeman expects rising demand for warehousing at or close to major container ports, warehousing on intermodal sites and storage in or on the edge of major urban areas for home delivery and 'last mile' solutions. As regards Off-pitch locations which are poorly located in relation to the key freight corridors, these could become obsolete.

All that, however, is in the future and hauliers cannot take their eyes off the ball on serious issues today, like safety and how to squeeze more revenues from existing operations. Too often some of the 400,000 HGVs on Britain's roads roll over, sometimes with fatal consequences, and usually they are caused by load movement owing to poor or non-existent load lashings. Ray Engley, head of technical services for the RHA, outlined the extent of the problem, causes and solution in his talk on "Load Securing -- from Theory to Practice".

Load security problems persist, particularly in curtainsiders, because there is evidence of poor practice, inconsistent enforcement, and no straightforward standard for operators. However, from April 12, 2012 VOSA's enforcement approach to load securing has changed to make it clear and more consistent.

In an example from a 2011 stop day, where vehicles were found defective, 49% of them related to inadequate load securing, 24% had no secured load and 15% an unstable load. The advice to combat this is simple enough. In the event of doubt on load security, RHS members should carry out a risk assessment for the load being carried. But is it really that simple, wonders this writer. As in warehouse forklift operations where the need to move goods out the door quickly to meet time constraints is often present, so, too, hauliers working under similar constraints where the business culture emphasises operational speed, conspires against any practices that may slow down throughput rates.

There is one peril lurking within road transport which often escapes mention -- the deliberate overloading of ISO containers. Quite apart from the many millions of pounds this behaviour deprives ship owners and governments, the accidents from such overloading can be horrific and far reaching, as in the case of the MSC Napoli container ship grounding off the Devon coast a few years ago, where gross overloading was a serious contributory factor. This problem will not be resolved effectively until weighing of containers at ports is made mandatory. "It's a major issue," said Mr Engley, "and we are working with the BSI to evaluate rules on loading containers." Ultimately, however, the IMO must be the enforcer but despite its many sound bites on promised action it has so far failed to deliver.
-----------------------------------------------------------------------------------