Time to invest in the future of logistics

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Just 16 days until the UK referendum on membership of the European Union – not surprising perhaps that uncertainty over the future is having an impact on business confidence.

Malory Davies, Editor

Malory Davies FCILT,

Nowhere is that more clearly apparent than in the latest UK Logistics Confidence Index from Barclays and Moore Stephens which reveals that confidence among senior members of the UK’s logistics sector is at its lowest level since the biannual survey began in 2012.

The index now stands at 51.8 – just above the critical 50 mark. That’s a fall of ten points from the last survey which covered the second half of 2015.

It found that logistics businesses are facing increasing pressure from customers for lower prices during a period of rising competition and increases in costs. To respond, logistics businesses are increasingly focusing on value-added services and technology as a route to retaining existing clients and to attract new business.

Despite the challenges ahead, some 70 per cent expect turnover to rise over the coming year and the same number feel sufficiently confident to be planning to invest in capital expenditure over the next six months.

Rob Riddleston, Barclays’ head of transport and logistics, welcomed this high level of planned capital expenditure, saying it reflected the sector’s pressing need for investment in technology. “It is also encouraging that the role of technology is recognise as a route to both control costs and improve service levels and investment in this area is a key trend for the sector.”

Investment in the future is also a theme of another supply chain study – this time from the Society of Motor Manufacturers and Traders which says that some £225 million is to be invested in the automotive supply chain over the next three years.

The SMMT surveyed more than 100 supply chain member companies – 94 per cent said they plan to invest in their businesses over the next three years – provided there is political and economic stability and the long term growth of the UK automotive sector.

Confidence in the UK logistics industry might have taken a knock in recent months, but the other indicators point towards long term growth. Perhaps this is the time to keep our eyes focused firmly on the future.



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