3PLs optimistic about 2013

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UK logistics providers are optimistic about 2013, despite a fall in confidence in the second half of 2012, according to the latest Barclays and Grant Thornton UK Logistics Confidence Index.

The survey found  the majority expecting an increase in profits (52 per cent), headcount (37 per cent) and CAPEX spend (57 per cent) over the next six months.

To achieve future growth plans, almost half (49 per cent) will focus on winning new contracts and maintaining their existing client base (48 per cent), followed by cost control (39 per cent).

While companies are looking ahead with optimism, the index for the second half of 2012, at 52.5, was down ten per cent from the first half of 2012, showing a decline in confidence.

The survey also found that many logistics providers are starting to push innovation up the agenda.

Over half (55 per cent) will be implementing new innovative supply chain solutions over the next six months with a further 19 per cent actively reviewing options. The two main areas of focus identified will be investment in IT (28 per cent) followed by collaborative solutions (24 per cent).

The majority of respondents believe there is still efficiency to be achieved through greater collaboration, however it is a lack of understanding by their customers that is restricting real progress in this area. 66 per cent of respondents believe manufacturers and retailers only understand to a limited extent the benefits of supply chain collaboration, while 23 per cent state they don’t fully understand at all.

 “Logistics businesses have often been viewed as ‘commodity’ type providers by their customers, and therefore the development and offering of new services across the entire supply chain will help to change this perception,” said Rob Riddleston, head of transport and logistics at Barclays said.

“Greater opportunities in collaboration exist, but the challenge is getting the much needed buy-in and change among all customers.”

Many companies believe greater consolidation in the industry is needed. Of those surveyed, 27 per cent are either likely to make or will be making acquisitions over the next six months, while 13 per cent are either actively reviewing or will make disposals.

Philip Bird, director, corporate finance at Grant Thornton said; “We anticipate further mergers and acquisitions activity in the logistics sector in the short-term.”


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