Logistics delivers the economy despite the odds, says FTA industry report

Monday 11 April 2011

A toxic combination of rising business costs, public spending cuts, tough trading conditions, restrictive regulations, severe weather, national security issues and natural disasters meant that 2010 was a particularly tough 12 months for UK logistics. The Logistics Report 2011, published by the Freight Transport Association (FTA) in association with PricewaterhouseCoopers (PwC), charts the ebb and flow of the last year, analysing the challenges and triumphs of 2010.

The Logistics Report collates a unique set of industry statistics and official data to present a dashboard of the performance of logistics in all modes and across the range of economic activities.

While 2009 was characterised by redundancies and insolvencies, figures reveal that fewer companies made staff redundant in 2010, with those expecting to do so in 2011 having halved. But with transport operating costs having risen well above inflation (the cost of diesel alone rose by nearly 15 per cent in 2010), road transport operators have clearly scaled back on investment and training.

FTA Managing Director – Policy & Communications James Hookham said:

“Logistics is the lifeblood of the economy, delivering raw materials, finished consumer goods, essential supplies and vital public services. Everyone should be interested in its performance and achievements. The Logistics Report 2011 tells the story of the past 12 months and presents an account of how the millions of people employed in the sector are responding to the challenges of fast changing commercial, political and natural environments.”

The report covers the prevailing business sentiment amongst freight transport operators, based on FTA and PwC surveys and analysis; the dramatic consequences for transport policy and spending following the General Election and the Coalition government; and logistics’ agility and responsiveness to two bouts of severe winter weather and the closure of air space due to the volcanic ash cloud emanating in Iceland.

Hookham continued:

“Logistics prides itself on being a responsive and progressive industry, able to perform its essential function, despite the obstacles thrown at it. Two spells of treacherous winter weather at the beginning and end of the year, felt most markedly in Scotland, tested the true grit of road and rail operators as they battled to keep the nation’s supply chain going. Similarly, the intelligent deployment of road freight services allowed air freight that was disrupted by the Icelandic ash cloud volcano to still reach its destination in Europe.”

In 2010 FTA worked hard to convey to a new government its key manifesto commitments for greater infrastructure investment, a fairer deal on fuel duty, support for modal shift and to let the logistics sector take the lead on carbon reduction initiatives. The Logistics Report shows that industry’s perception of government has improved, with only 12 per cent believing that the government has no understanding of the role of logistics in the economy, compared with 26 per cent in the preceding year. This is welcome news for a political lobbying organisation that is still looking to influence future policy on such things as modal shift, longer-semi trailers, the promotion of night-time deliveries and giving the industry the means to reduce its own carbon footprint.

Hookham concluded:

“We have made good progress, influencing the transport policies of the Coalition government – witness the reduction in fuel duty announced in the Budget. However, public perception of the sector shows there is still much to do. The Love Logistics campaign, of which this report forms part, aims to raise awareness and understanding of logistics and the vital contribution it makes to everybody’s lives. The Logistics Report will become an important annual milestone in monitoring and reporting progress in the campaign.”

Coolin Desai, UK Logistics Industry Leader for PwC, commented:

"We are very pleased to be supporting FTA’s annual Logistics Report. The report highlights the key issues and progress being made in an industry of vital importance to the UK and which has a significant impact on stakeholders from across government, business and society."

FTA Press Office

01892 552255