NAI Fuller Peiser and the Freight Transport Association’s latest research into the Road Transport Directive – the part of the Working Time Directive aimed specifically at the logistics sector – has revealed that its predictions last year are coming true.
For example, in March 2005 two out of five companies forecast that the RTD would have an influence on their property requirements. Six months later, one in 20 organisation said it had affected them more than expected – and a year on, one in four said that it had actually impacted on their property needs.
The research also pinpoints an increasing awareness about the bearing that the RTD is having on warehouse location. In March 2005, one in three businesses forecast that the directive would create a need to move their warehouses closer to urban areas. In November 2005, one in fourteen companies said that this situation had occurred and now, 12 months later, one in nine companies believe it to be the case.
With regard to distribution hot spots, originally two in five companies forecast such an outcome. Three months after the directive became law, one in eight companies identified The Midlands as a prime hot spot location. A year later, and over half of all companies surveyed think that the region will continue to be a hot spot in the next five years.
Martin Coles of NAI Fuller Peiser said: “The results from our latest findings show that, with out doubt, the RTD is starting have an impact on the transport and logistics sector’s property requirements. Many companies may well still be in denial about this fact but the evidence is here for people to see; property location and specification will become more, rather than less, important as time passes and companies take action as soon as possible to prevent spiralling costs.”
Many short-term fixes are now floundering and logistics companies are beginning to feel the pressure said the report: “The majority of UK businesses are paying a high price and sacrificing already small profit margins to remain compliant with the RTD.”
It was predicted that one of the simplest ways to remain compliant was to employ more drivers and rely on Periods of Availability. This has occurred, said the report, with over a quarter of companies now employing more drivers as a result of the RTD. More than a half have had to make changes to their delivery routes and schedules – with one in six saying that the directive has created a need for them to reduce the number of daily deliveries (although many are not actually able to do so because of customer pressure).
Mr Coles said: “When our initial findings were made public a year ago, we stated that many companies might simply decide to deploy more drivers and more lorries to become RTD compliant – and predicted that they would incur unnecessary costs as a result. These findings demonstrate that businesses are now facing exactly this kind of additional and unsustainable expenditure we suggested, because they have not focused on identifying ways in which either the configuration or location of their property could help them achieve cost-effective long-term RTD compliance.”
Research results were based on responses to 193 web-based questionnaires developed by the FTA & NAI Fuller Peiser and completed by FTA members during January and February 2006.