The opportunities for Suffolk as a major distribution hub in the age of online shopping
PUBLISHED: 05:30 23 January 2019
While the craze for online shopping is leading to empty shopfronts, it's also bringing a massive boost to Suffolk's warehousing and logistics industry.
It’s a road that’s all too often chocked up with traffic. But the A14 in Suffolk is about to take centre stage in a “significant, and long-overdue” expansion of logistics and distribution activity that is bound to provide a welcome boost to the local economy - but which also makes the need for investment in the A14 more urgent than ever.
For decades, the A14 has provided a vital link between the UK’s largest container port, Felixstowe, and the so-called ‘Golden Triangle’ of warehousing and distribution operations in the Midlands, bordered by the M1, M6 and M42.
But new data from Savills demonstrates that the Golden Triangle is slowly losing its unchallenged status as the go-to location for big sheds, as online retail is reshaping the geography of the commercial property market. To establish a quicker delivery service, firms are now starting to focus on developing their final mile delivery centres closer to other major population centres.
Planning consent is now in place for more than six million square feet of warehousing on ten sites in Suffolk and Norfolk within 40 miles of Felixstowe - much of it along the A14 corridor - and 350,000 sq ft has already been completed.
It means that in the future, much of what we buy in Suffolk online from overseas can go straight from Felixstowe Port to a nearby warehouse, and then straight on to our homes.
“The A14 is now becoming the logistics highway for the UK,” says Stephen Basey-Fisher, managing director of Century Logistics, a third party logistics provider which operates over seven sites - six of them in East Anglia - from its base in Bury Saint Edmunds.
“It is the first time in two decades that there has been any new warehousing built of significance along the A14 to capture the goods coming out of the Port of Felixstowe. It gives us the opportunity to develop our business between our head office in Bury St Edmunds and the Port of Felixstowe, rather than towards the Midlands.”
So what is driving all this expansion? Brexit stockpiling has something to do with it, and Mr Basey-Fishers says his clients have been increasing their stock by 5% to 10% in readiness for the UK’s departure for the EU.
And in the long term, Mr Basey-Fisher claims we will need more stock in the UK after Brexit, because the supply line will be extended.
“It might only take 2% longer to get cargo through ports, but customers might decide to keep 10% additional stock, perhaps one container,” he says. “That is a lot of additional space needed.”
But the main reason for all these new warehouses has to do with our shopping habits.
“The world of retail is changing, and logistics is the future,” he said. ” says Mr Basey-Fisher. “This new digital generation have grown up expecting next day delivery. It makes sense to deliver their purchases from large warehouses next to the port.”
The ‘Generation Z’ which Mr Basey-Fisher is referring to make up only 10% of consumers at the moment, but they are likely to make up 40% within five years.
“Warehouses closer to the port can receive containers quickly and arrange onward delivery overnight at less busy times on the roads,” he explains. “They can achieve next-day delivery and late cut-off times by having critical mass. They can also create greener supply chains with a lower carbon footprint.”
Mr Basey-Fisher claims that the new warehousing will also attract big e commerce giants from abroad, who he believes are becoming more regional in their approach. “National distribution centres are becoming costly - regional centres are the future, because companies want to be closer to the population buying the products,” he says.
One of the largest sites being built is the 114-acre Suffolk Park scheme at Bury St Edmunds, which is next to the A14; it has outline planning consent for up to 2m sq ft of logistics, manufacturing and business space, and the property development company Jaynic is developing two large speculative logistics units there.
The Port One Logistics Park at Great Blakenham is a build-to-suit development with outline consent for units of up to 700,000 sq ft. Interest from the e-commerce sector is particularly strong and, with terms already agreed, the first unit will be constructed from the beginning of 2019.
Mr Basey-Fisher is joining other members of the Suffolk Chamber of Commerce to meet Transport Secretary Chris Grayling to make the case for £150m government investment at seven pinch points along the A14.
Jo Churchill, MP for Bury St Edmunds, explains that the significant investment in warehousing along the A14 is something she has fought for over the last four years. “The environmental benefits as well as the commercial benefits of establishing Suffolk as a major distribution hub brings us huge opportunity – but we must push forward and get the infrastructure right,” she says. “The importance of the corridor and its positive contribution to the economy is not always understood. People talk about the Oxford and Cambridge corridor, but for me this ignores the important element that we should be connecting from Felixstowe to Bristol and up to the Midlands.”