Ready for the Christmas sack race

According to Adam Cieślak, a property manager at Prologis, there are several periods during the year when the volume of goods that warehouse parks have to handle dramatically increases. The first such period begins in January, when restocking takes place following the Christmas season. The next is in March, when the preparations for Easter begin. The summer holiday period is also a high season. And, finally, there’s the Christmas shopping rush. The preparations for this period begin in mid-October with the stocking up of warehouses. Then the high volumes continue up until Christmas Day, as the goods are distributed to stores as well as on to the final customer. “As a percentage, volumes increase by around 20–25 pct compared to other periods,” explains Adam Cieślak.

Poczta Polska (the Polish Post) estimates that they handle 50 to 70 pct more parcels in December compared to other times of the year. In the run-up to Christmas 2020, the post office employed an additional 1,500 temporary workers, including sorting centre staff, drivers and couriers. For clothing chain LPP, the greatest volume is at the end of October and early November. “We increase our stock levels and our warehouse staffing levels because we distribute 100 pct more over this period than in a regular season,” reveals Sebastian Sołtys, the director of logistics at LPP.

This Christmas the challenge in Poland was, above all, the unprecedented volumes of parcels due to e-commerce sales. The first wave of Covid-19 led to a spike in online orders, but the second was even greater. According to Mirek Gral, an e-commerce analyst at Last Mile Experts, the number of B2C orders placed by individual customers a couple of weeks before Christmas was three times larger than in the same period of 2019, and one week before Christmas it still was around a 25 pct up y-o-y.

A manager that never sleeps

Warehouse park managers also have to prepare for the winter holiday season. They have to ensure that all the facilities have been serviced. “Inspections usually begin around October,” explains Tomasz Chmielewski, the managing director of industrial gate producer Novoferm. The peak of the Christmas season is also characterised by an increase in urgent service call-outs. ”Unlike in normal periods, when most matters can wait until the morning, over the Christmas period a 24-hour maintenance service is required as then it is more likely whenever the telephone rings that it’s someone asking for help to come ‘right now’,” he says. Normally, when a gate is damaged during a night-time delivery the lorries are simply redirected to a different gate until it can be repaired and so there’s then no problem. But during peak periods, this is often not possible because the scheduling is so tight that truck departures cannot be delayed. “If we don’t send the consignment off on a given day it will ruin the next day’s scheduling, so at peak periods the demand for such servicing rises,” adds Tomasz Chmielewski. With a greater number of vehicles, an integrated system can help manage the traffic – for example, those that provide access to the park. “Most of our parks in Poland now have modern number plate recognition systems,” says Waldemar Witczak, a regional director at Segro.

Park managers, just like road workers, can’t afford to allow the winter weather to surprise them. Snow clearing schedules therefore have to be drawn up with the tenants before the winter. “As a result, we know which gates and docks are the most important to our tenants and where we have to start clearing the snow if necessary to ensure that their operations run smoothly,” reveals Adam Cieślak. Supplies of salt and sand are brought in before the season, the areas where snow will need to be cleared off the roofs are identified, and there is an inspection of the drains and roof installations. Prologis’ manager believes that it’s vital to stay in close contact with tenants over this busy period. “That’s why we are available virtually 24 hours a day. This enables us to respond to tenants’ needs immediately on an ad hoc basis. We can, for example, help them re-organise the space in the manoeuvring areas or offer them temporary short-term leases for extra space if we have any available in the park,” insists Adam Cieślak.

Tech to the rescue

The question arises of whether technology can help take the pressure off during peak warehousing periods, and the answer appears to be both yes and no – according to Przemysław Piętak, the managing director of Logisys, which specialises in logistics consultancy. “You don’t set up automated warehousing systems, after all, just for peak times, but in high seasons you can scale them up from their normal operations. If you designed a system just for peak periods it would only be used for a few weeks a year, and as these are expensive systems it wouldn’t pay off,” believes Przemysław Piętak. Generally, such issues are resolved not with modern technology but through the use of the extra zones within warehouses, where temporary workers can be stationed. “Often the best solution is to lease an empty hall that doesn’t even have any shelves, where you can store the goods on the ground. You can operate in this way for about a month. In such a hall you don’t have to use high storage forklifts and for completing orders you don’t need people with special qualifications, which is rather important when there is a lack of skilled labour available,” explains Dariusz Adamczak, the CEO of warehousing equipment distributor Darlog. And yet, those who possibly went over-the-top when it came to installing hi-tech systems, which at that time might have seemed like a mistake, are now clearly reaping the benefits of having done so. It’s also worth pointing out that according to a recent report by Axi Immo, during the first wave of the pandemic between April and June a record 262,000 sqm was leased on short term contracts.

Managers have been directing their focus onto automation for some time now and warehouse management systems (WMSs) have already become common features of many parks. “Many clients now understand that they need to take an active interest in investing in technology and need to find the money to do this. After all, we have to be able to handle the significant rise in online sales and this means that warehouses will have to operate more efficiently,” believes Dariusz Adamczak.

This need for efficient operations is only going to become more pressing. According to a recent report by CBRE, up to 72 pct of Poles believe that goods should be delivered within two days while only 2 pct are prepared to wait a week for their purchases to arrive. Dariusz Adamczak insists that optimising warehouse operations is the key to ensuring rapid delivery, resulting in both satisfied customers and greater sales volumes. “Of course, at each stage of the delivery chain something can be improved, but it all starts in the warehouse – and it’s improving things at the starting point that is often neglected,” he points out. One easy way, but one you have to pay for, is to outsource some of your operations before the peak season begins to a specialist logistics service. These usually have sufficient additional resources to be able to take over such operations. If, on the other hand, a park manager is determined to handle all of its logistics operations on its own, it will need to find sufficient time for installing the WMS needed to do this. ”Putting a basic WMS in place only takes a few months. But the time required to set up a full automation system, from the initial needs analysis to the design and installation, can even take as long as around two years,” admits Dariusz Adamczak.