Looking forwards; David Wells reviews 2020 and spotlights opportunities for 2021

MIXED PICTURE FOR LOGISTICS

As Chief Executive of Logistics UK, one of the UK’s biggest business groups, David Wells has had a ring side seat on the pandemic’s impact on UK business. As far as the logistics sector is concerned, however, he believes it has been a mixed picture with a downturn in business balanced by some positives.

“The logistics sector has come out of it stronger than many feared at the start,” he said. “It has definitely impacted the smaller operators in a very detrimental way, but I think the government schemes for businesses at every level have been targeted at trying to get businesses through the worst of this.”

Wells singles out the government’s furlough scheme for special mention, which he describes as “one of the most generous of the developed world,” and credits it in large part to the fact that the unemployment figures are not as bad as many feared.

One positive he is keen to underline is that politicians and the public are starting to understand the importance of logistics and supply chain. “Is it a horrible year? Yes it is, but I think the public’s appreciation of what the sector does and how supply chains have stepped up to keep product moving and keep people stocked, I think that’s a good thing that’s come out of it.”

STEERING THE SECTOR THROUGH THE STORM

As the UK’s largest multimodal trade bodies, Logistics UK has been instrumental in helping mitigate the worst effects of the pandemic for its 18,000 member businesses. This has largely been done behind the scenes by representing the sector and the challenges it faces to various government departments.

“Clearly we have done a lot for the industry in terms of easements and concessions that we’ve secured with the Department for Transport,” he said, “But also I sat on daily calls with BEIS [Department for Business, Energy and Industrial Strategy], helping them to put in the various funding and loan schemes for businesses at every level. For the industry we are starting to be seen to represent the sector at a business sector level, which has got to be important for the skills agenda and for the recruitment of talent into our sector. These are the things that, strategically, will make a difference to the logistics industry.”

LOCKDOWN PRESSURES ON LOGISTICS

When the Health Secretary Matt Hancock revealed in the House of Commons on 14 December that a new, more highly transmissible variant of COVID had emerged, it was inevitable that it would lead to a series of progressively tighter lockdowns. These have particularly affected a number of UK business sectors, including retail and hospitality, as well as the logistics companies that service them.

Although they impact on many of his members, Wells will not be drawn on commenting whether the stricter government guidelines have gone too far, or possibly not far enough.

“I think it’s very easy to sit on the sidelines and criticise government and do that with hindsight,” he said. “I actually think they’ve done some remarkably good things.”

Wells praises the government’s investment and rollout of vaccines, which given the logistical challenges involved, is happening quite quickly. He also believes that its Track and Trace system is starting to come good.

“There’s no text book for this,” he said, “You’ve only got to look at the numbers to realise that this is a serious situation. The trend is still upwards. It definitely feels different to the first lockdown in April and May. It feels like it’s got closer.”

SKILLS SHORTAGE SOLUTIONS

While Logistics UK has broadly welcomed the Free Trade Agreement struck between the UK and EU on Christmas Eve, the UK’s departure from the EU has led to more than 79,000 EU workers returning home.

What can the logistics sector do to attract new talent into the industry? The solutions to the industry’s skills shortage are not short term ones, according to Wells.

“There are things that can be done to facilitate driver training for example as an apprenticeship scheme,” he said, “But there’s a much wider issue about skills, relating to all sorts of functions in our sector – HR, marketing, finance. Our sector needs to be seen as modern and professional. It needs to be seen as attractive for young people to commit to it. I think the industry needs to ask itself the question: how best do we portray the sector as a modern, attractive proposition for young people?”

Wells believes logistics businesses should position themselves as exemplary employers and make their workplaces attractive places to work and supply IT equipment that is modern and up to date.

“We are going to be in a battle for talent, particularly if the availability of labour from the EU dries up, and therefore there is going to be a limited pool of talent in which every sector is going to be fishing,” he said.

Wells does not shrink from speaking truth to power either. “The other thing I said forcibly to [Transport Secretary] Grant Shapps is every time we have a queue of trucks at Dover and we expect drivers to go to the loo in the bushes, we damage this industry. We damage its prospects to recruit young people into this sector because they think if you treat your drivers like that how will they treat me?”

VACCINE ROLLOUT

The government’s attention is currently committed to ensuring that the vaccine delivery programme is rolled out to help combat the steep rise in COVID cases as quickly and safely as possible. How important is the logistics sector to the timely deployment of this vaccine?

“It’s really critical and I think the sector has shown that it can step up and deliver,” Wells said without hesitation. “Don’t forget the Pfizer vaccine has to be stored at -70 degrees. The industry is used to handling frozen product, there are sectors in the industry that are used to handling medicines, and we’re used to delivering just in time. I think logistics is a key component in making a success of this.”

DIGITAL REVOLUTION HERE TO STAY

2020 saw a mass migration to cashless digital services, as traditional bricks and mortar businesses found it increasingly difficult to trade. If and when life returns to something like normal later this year, what trends does Wells predict will remain in the world of transport and work?

“Undoubtedly this has given a massive shot in the arm to online retail,” he said. “The growth in home delivery has just accelerated beyond most couriers’ wildest dreams. I think the high street has to rethink what function it really plays in the retail space. That is a trend that won’t be reversed. It’s too convenient to order online and the logistics are too reliable not to do it.”

As far as the working from home phenomenon goes, Wells agrees with the Prime Minister that 100% home working will not be the norm in the future.

“People like to meet each other,” he said simply, “and that’s part of what you get from work. Over time I think people will come to a balanced position where they balance working from home and being in the workplace. It will reach the point of equilibrium.”

While he believes that the IT infrastructure has stood up really well, with the UK broadband network enabling hundreds of thousands of video conferencing calls to take place simultaneously, he does not see it as the total solution.

“I think the technology is there, but you can’t take away the human desire for people to meet, socialise, interact, laugh,” he said. “How can you induct someone new into a team unless they can really meet you? Those things will never go away.”

CHALLENGING ECONOMIC OUTLOOK

The economic outlook will continue to be difficult for smaller operators, Wells believes, and he urges any struggling business to take advantage of all the government schemes designed to support them. However, he also sees an opportunity for UK hauliers to pick up work that was being done by European hauliers ahead of Brexit. “Don’t close your mind to bigger opportunities in importing product to the EU,” he said.

Even if the UK does end up approaching normal trading conditions by the middle of the year, with shops and hospitality businesses reopening, Wells does not think the economy will get back to where it was at the end of 2019 by the end of 2021.

“There’s going to be a wholesale shift,” he said. “The structure of our employment, of our workforce will change, because this sort of turbulence forces people to be more efficient, take costs out of their organisations. Therefore, there’s going to be a whole swathe of people who are going to have to learn new skills and take on new jobs that they wouldn’t have considered before.”

EVOLUTION KEY TO SUCCESS

As a sector, logistics has long been famed for its resilience and adaptability. While it looks all but certain that the UK will face its first double dip recession since 1975 this year, how optimistic is Wells that the logistics sector can bounce back?

“I am optimistic,” he said, “I think it will bounce back relatively quickly. At the end of the day, the core of this industry has supported the UK economy throughout this crisis. It will come back; it will bounce back. It might shift, but it’s shown itself in the past to be very adaptable to change.”

*www.logistics.org.uk
 

Published On: 14/01/2021 17:00:37

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