Logistics UK survey takes the industry’s temperature

The financial health of the 130 survey respondents fell slightly in March 2021, with smaller companies with fewer than 50 employees and 100 vehicles (which account for 36% of respondents) more likely to experience poor financial health.

However, the respondents’ business outlook for the next six months continues to be positive, increasing slightly from 6.6 to 6.7 in the month to March, while the proportion of businesses in the transport and storage sector with cash reserves of more than six months reached its highest level in March 2021.

FUEL PRICES RISE, CONGESTION REMAINS LOW

With diesel accounting for nearly one-third of the cost of running a 44-tonne truck, the survey found that rising fuel prices are continuing to exert upward pressure on operating costs. However, this is mitigated by the fact that road congestion and delivery times are still positively impacted by COVID-19 restrictions. Although HGV traffic was 6% higher than pre-March 2020 lockdown levels, van traffic was 6% lower and car traffic was 27% below usual level, according to statistics from the Department for Transport. Both car and van traffic has risen since February, however, as schools have reopened and online shopping has increased.

IMPACT OF BREXIT

Following the end of the Brexit transition period on 31 December 2020, more than four out of ten respondents reported delays in receiving goods (43.1%) and additional paperwork (42.3%). Just over a quarter (26%) reported that their suppliers experienced delays in receiving parts, which may present issues for vehicle maintenance and repair. Fewer than one in three respondents (32.5%) said they had not been affected by the end of the transition period.

SUPPLY CHAIN DISRUPTION

Disruption to the supply chain led almost half of respondents (46%) to report that costs had risen, although around one in five indicated that they had decreased. While overall freight volumes began to approach normal levels in March, more than half of respondents (56.2%) reported experiencing at least a minor level of disruption, which has negatively affected their businesses. Following the end of the EU transition period, almost half of respondents said they would diversify their suppliers (45%), one in four reported using more UK suppliers and one in five indicated they would be expanding to use different modes of freight.

IMPORTING AND EXPORTING CHALLENGES

In March, the volume of goods to Northern Ireland returned to normal levels. However, respondents were importing less than normal from all EU countries, while almost one in three (32%) had not been able to export, mainly owing to reduced demand for products and services. March showed the largest monthly fall in exports from the UK to the EU since records began 20 years ago.

HIGH DEMAND FOR HGV DRIVERS AND MECHANICS

HGV driver roles are becoming increasingly hard to fill with more than three out of four respondents (75.8%) reporting recruitment difficulties. Plus, around two thirds of respondents are experiencing issues filling vacancies for mechanics. The number of HGV drivers claiming Jobseekers’ Allowance increased marginally to 115 in February 2021, up from 110 in January, but down 18% from a year ago, while the number of van drivers claiming the benefit fell to 1,535, down 14% on the previous year.

The results of the LPT are borne out by the Office for National Statistics vacancies data (provided by the online job search engine Adzuna) for 19 March 2021.  These show that the number of online job adverts in the transport, logistics and warehouse sectors was 60% above the same period last year, compared to a 2% uplift in job adverts across all sectors.

*www.logistics.org.uk/lpt

Published On: 08/04/2021 17:00:44

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