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Brighter times for logistics firms despite Brexit concerns

Business conditions for transport and logistics firms have improved over the past year and firms are more optimistic than a year ago although most expect Brexit to have a negative impact, says a survey from Barclays Corporate Banking and Moore Stephens. Its UK Logistics Confidence Index 2017 shows that 11 per cent more firms saw  business conditions as more positive that a year ago and the sector is in more robust shape than five years ago. The scope for value added services, greater collaboration through M&A and new technology - particularly using data for customer retention -   were grounds for optimism. Four in ten logistics operators say they are likely to make an acquisition over the next 12 months. Yet most firms are waiting for more clarity on Brexit before acting and few operators are changing their warehouse footprint, for example, by looking at Ireland as a route to the EU.

Simon McCarthy, head of Barclays Corporate Banking, Cambs, Beds and Bucks, said:“The confidence reported in this year’s index is really encouraging and demonstrates the resilience of the sector. Despite a tough environment, firms are getting on with it. However, as the path ahead becomes clearer, this business as usual approach will need to flex. The battle to retain customers looks set to become more aggressive, as operators work to differentiate themselves through investment in new technologies and the value added services that win customer loyalty, while the appetite to acquire, even in the next 12 months, is telling. Both could become significant threats for those businesses who do not face the changing operational landscape head-on, and so miss out on taking advantage of its opportunities.”

Data is key

With the new business pipeline more difficult to maintain, the Index shows providers are also investing in customer retention strategies. Over a quarter of logistics providers (27%) attribute value added services as the main driver in contract wins, with 69% investing in innovative supply chain solutions.  Additionally, almost half (47%) of the companies surveyed say they are already investing in data-driven supply chains and a quarter (23%) will implement ‘Big Data’ solutions in the next 12 months. All will contribute to more efficient operations, as will cloud services which are the most popular new technology for future investment, with 27% of operators saying they will implement cloud-enabled solutions over the next 12 months.

Bolstered by the Department of Transport’s commitment to invest £8.1million in self-driving truck trials, technology is also helping logistics companies to deliver staffing efficiencies. One in ten (10%) logistics operators say they are investigating the use of driverless trucks.

 

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