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The results are in: Logistics Performance Tracker Q2 2024

Logistics UK’s Logistics Performance Tracker highlights industry concerns about changing trade processes and ongoing supply chain challenges.

The logistics sector has a slightly pessimistic outlook for the economy, with members rating UK economic outlook for the next six months at 4.3 out of 10, according to the findings of Logistics UK’s Logistics Performance Tracker for Q2 2024. Business outlook and financial health are stronger at 6.3 and 7.0 respectively.

Supply chains issues paint a similar picture of concern, with 66.0% of respondents reporting increased transport costs as the most pressing issue in Q2, likely reflecting higher fuel prices and general inflationary pressures.

Two-thirds of respondents reported increased transport costs as the most pressing issue affecting their businesses in Q2, likely reflecting higher fuel prices and general inflationary pressures.

Supply chain disruptions were also prominent, with 55.0% of suppliers experiencing delays in receiving parts, exacerbating production and delivery challenges. Disruption at UK borders (39.4%) and additional paperwork (39.0%) further complicated logistics, likely due to ongoing EU Exit-related adjustments. Delays in receiving goods (38.2%) and extended delivery times to the EU (30.4%) indicate that these issues continue to impact efficiency and reliability in supply chains, contributing to the overall strain on the industry.

Looking ahead, members are concerned about worsening road congestion and delivery times. The cost of living is also expected to deteriorate in the third quarter, which negatively impacts both operational costs and consumer demand, adding further financial pressure to an industry already operating on tight margins.

Sarah Watkins, Deputy Director, Policy Information says, “We know our sector operates on tight margins and our latest Manager’s Guide to Distribution Costs evidences further pressures, with total HGV operating costs rising by 4.8% for the 12 months to 1 July, and fuel costing up to 29% of all operating costs. To avoid inflationary cost pressures on the rest of the economy, Logistics UK is calling for the extension of the five pence per litre (ppl) cut in fuel duty beyond March 2025, in the upcoming Autumn Budget.”

The survey also finds that EU Exit is continuing to hamper trade. Two-fifths of respondents experienced both disruption at UK borders as well as additional paperwork. In addition, confidence in the government's readiness for the introduction of Safety and Security Declarations under the Border Target Operating Model in October 2024 is low, with an average rating of 3.6 out of 10. Similarly, confidence in the readiness of both government and businesses for changes that were planned, and have since been delayed, under the Windsor Framework from next month was also low.

Logistics UK continues to call for further support and clarity to help industry prepare for upcoming changes to trade processes. With changes imminent, it is critical that businesses have the adequate support needed to continue delivering for the UK economy.

Members can view a summary of results on our website here and respondents to the survey receive a full summary report.

The next survey will be launched in October. To participate, please contact research@logistics.org.uk

Logistics UK’s Logistics Performance Tracker (LPT), monitors the performance of the industry each quarter. Covering the second quarter of the year and measuring the sentiments of approximately 170 members, the results represent the views of over 12 sectors in the UK, of varying sizes.

Published On: 26/09/2024 11:14:48

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News In Brief

FedEx announces switch from diesel to HVO

As part of their journey to reduce linehaul emissions, FedEx UK will now refuel more than 170 trucks – all tractor-trailer combinations – with hydrotreated vegetable oil (HVO) across FedEx locations in Parkhouse (80 tractors), Marston Gate (54 tractors), and Atherstone (38 tractors).

In a two-year agreement with supplier, Crown Oil, FedEx has secured the purchase of at least four million litres of the fuel annually. FedEx claims that the change to HVO will deliver certified lifecycle carbon emissions savings of at least 80% compared to diesel and offers one way of reducing the emissions of operating a network of heavy goods vehicles.

FedEx Express began using 100% HVO fuel as a direct replacement, or ‘drop-in’ alternative, to diesel, in UK operations in October 2023. This earlier trial, along with a similar pilot in the Netherlands, allowed FedEx to evaluate the practicalities of refuelling with alternative fuels and highlighted HVO as a preferred route to help FedEx transition from diesel to biofuels in its European road network.

James Richards, Senior Manager Road Network Operations UK, FedEx said: “FedEx operates an expansive road network across the region. We’re excited to share that the UK is the first country where we’re able to scale the use of HVO in our operations, in what we hope will be a permanent operational change.

"We’ve been trialling our use of this fuel for eight months already and with this purchase agreement we’re increasing our consumption sufficiently for our fleet to drive approximately 36,000 miles each week on alternative fuel.”