Transport and logistics companies must negotiate a complex cocktail of market risks to achieve stability, prosperity and growth.
In an industry where margins are being squeezed, and many SMEs face tough competition from their larger counterparts, harnessing the power of data and technology is essential in facilitating intelligent decision making.
Crucially, firms must realise that not all business is good business – identifying the most profitable opportunities and driving efficiencies within their fleet often holds the key to longevity and success.
A shortage of HGV drivers is an ongoing problem for transport and logistics businesses. At present, there are around half the number of HGV licence applications each year than there are people leaving the industry, while the rising cost of licence acquisition and associated lifestyle choices are impeding the attraction of young talent. With skilled workers highly sought after, smaller logistics firms often struggle to retain employees, many of whom are lured away by the higher wages and attractive employee benefits packages offered by larger, global providers.
For most, a rising cost base is squeezing already tight margins and if unchecked could significantly dent profitability. Growing congestion in the UK’s sea ports, airports and on the road is increasing lead times and a shortage of suitable, affordable warehouse space is forcing some companies to purchase smaller spaces in non-prime locations away from their key infrastructure network. Finally, the weakening of the Pound post Brexit-vote has also led to an increase in fuel costs (oil is traded in dollars).
However, despite these factors, it’s not all doom and gloom. After extensive lobbying by the Road Haulage Association (RHA) the Government has backed a ‘trailblazer’ 12 month apprentice scheme for budding HGV drivers, which includes the cost of licence acquisition and attracts £2 of Government investment for every £1 invested by the business, with grants totalling up to £4,900 per recruit.
“The UK logistics industry is thought to be worth in excess of £55bn per year, and driven by an increase in online retail, demand is rising. This appetite for services, coupled with a shortage of capacity presents a huge opportunity.”
Andrew Galliers – Member of the Transport and Logistics Team
Transport and Logistics sector advice
We advise transport and logistics companies, from air and sea freight forwarders and hauliers, to domestic and international couriers. We work closely to find solutions to industry issues, utilising our expertise in everything from business strategy and corporate finance, to audit and tax advice.