From a factory in Asia to 'wrapped under your tree' in just six weeks

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The Independent Online

As you look at the pile of presents under your tree this evening, you may well sigh with relief that the Christmas shopping is over. But in searching high and low for the right presents, and struggling home with them, you had it easy. Getting the goods from the factory gate - now more likely to be in Asia than in Britain's traditional manufacturing bases - to the high street is a much harder task.

Despite fears about how the high street has fared this Christmas, the consumer society is booming. Shopping is the number-one leisure activity in the UK and billions of pounds are pouring into retailers' coffers - especially in the run-up to the festive season. This, in turn, means the multi-billion-pound logistics industry, with its planes, ships, lorries and warehouses, is booming.

Just outside the Buckinghamshire town of Milton Keynes is where NYK, the Japanese logistics specialist, chose to locate a 500,000sq ft warehouse. If you've bought a mobile phone, flat-screen television or computer, there's a good chance it came from this shed, which houses all goods sold in the UK by PC World and LG Electronics. Last week, it handled 300 lorry loads.

The warehouse has room for 42,000 pallets holding around 10 items each. A woman with a microphone assigns incoming lorries one of the 72 loading-bay slots. Men then whizz around in forklift trucks, unloading those lorries that have brought goods to the warehouse, or loading up the shop-bound ones.

Craig Thompson, the site manager, laughs when he points at the 12,000 giant, American-style LG fridges waiting to be delivered to the shops. "It's amazing, but these are really popular this year. Would you give your wife a giant fridge for Christmas?" Perhaps a better present would be another of this year's biggest-selling items: a 50in flat-screen television.

The usual volume of products passing through the warehouse doubles in the run-up to Christmas. Retailers tell NYK what they want, and when, and the company does the rest. Around 90 per cent of the orders it processes come from overseas, with most being shipped on one of NYK's 600 freight ships, the biggest fleet in the world. The products may also come through ports owned by NYK.

Of course, not everything will go to plan all the time. Earlier this month, gales in the South closed Southampton and Felixstowe, the UK's busiest ports for freight, which meant that ships had to offload their cargo in the North-east. As Mr Thompson jokes, all the planning in the world can't stop the wind blowing.

The logistics business has changed massively as a result of globalisation. Just 15 years ago, for example, around 80 per cent of car parts for the UK market would be made in the UK. Now, most come from overseas. While manufacturing costs have fallen as production moved to Asia, transport costs have risen.

The fickleness of fashion, and of consumers, dictates that goods need to be transported to the shops faster than ever before. This is particularly true of mobile phones, which are differentiated by branding and marketing rather than by what they can actually do; mobiles are one of the few product groups to be flown into the UK because they have such a short shelf life.

This Christmas chocolate-brown phones are de rigueur, says Mr Thompson, yet only a few months ago pink was all the rage. One customer recently asked NYK to change the blue covers of 75,000 phones sitting in the company's warehouse to then-fashionable pink.

All goods are turned around faster now, though. Ten years ago, a product would leave the factory and hit the shops between five and six months later. Now, thanks to new technology, it takes five to six weeks. Products no longer sit in warehouses for weeks on end while paper orders are processed; with electronic ordering, they hang around, on average, for only one and a half days.

Nor is just speed and efficiency that retailers demand. In this ultra-competitive market, they want secrecy. Among the rows of boxes sit some wrapped in black plastic liners. Ian Veitch, NYK's UK chief executive, says retailers are keen to stop rivals finding out what new launches they are planning.

And if, for example, NYK is handling logistics contracts for competing supermarkets or games companies, it has separate management teams to look after them so that sensitive information stays confidential.

The Christmas rush ended for NYK in mid-December. But staff remain busy, processing all the goods for the frantic period of the January sales.

Indeed, spare a thought for its 700 workers: tomorrow will be their only day off during the entire holiday period. And next month Mr Veitch and Mr Thompson will start planning for Christmas all over again.

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