The fire at Asos’s national DC on Friday has prompted the industry to think about the problems the could arise from with keeping most of customers’ stock in one place and what operators and their customers should do to reduce the risk to their goods.
Around 70% of Asos’s stock is kept at the 600,000ft² Barnsley DC and, following on from a similar situation in 2005 when its Hemel Hempstead warehouse was damaged as a result of the explosions at the Buncefield oil depot, analysts believe the online retailer had contingency plans in place to protect it from more damage.
Analyst John Manners-Bell, CEO at Transport Intelligence, said that while having a central global warehouse seems the most cost-effective option in terms of staffing and reduced risk, it may cost a business more in the event of a fire.
“If you start costing in external risks such as fires, floods and security issues, then suddenly it doesn’t look so smart,” he said. “As it is very difficult to quantify the financial cost of ‘Black Swan’ events, many companies pretend that the risks don’t exist.”
“Although Asos had insurance and the disaster could have been a lot worse, there will still be implications for the retailer in terms of customer service and reputation,” he added.
Norbert Dentressangle, which operates the site on behalf of the online retailer, has also been criticised by union Unite today. It said ND should give its staff the opportunity to join a union, as one of its primary functions is to promote health and safety programmes so staff know what to do in an emergency.
Although ND declined to comment on the event when approached by Motortransport.co.uk yesterday, it is likely to be doing all it can to ensure its customers’ business is back to normal.