Logistics confidence at low ebb

Optimism in the logistics sector is at its lowest level in 12 years, according to the latest Logistics Confidence Index with Brexit and the driver shortage contributing to current sentiment.

The Barclays and BDO survey which was produced in conjunction with Analytiqa, polled more than 100 senior decision-makers in the UK logistics’ sector during April and May of this year, to assess current confidence levels and industry expectations.

The overall Confidence Index has fallen from 52.6 in 2018, to 49.7 this year – dipping below 50 for the first time since the survey began in 2012, indicating that the sector is more pessimistic than optimistic about the state of the market.

Other key findings include:

  • More than half (58%) of respondents say current business conditions have become tougher in the past 12 months
  • While 62.4% of survey respondents think business conditions will get more difficult in the year ahead, close to three quarters still say they are likely or very likely to make a significant capital expenditure
  • The logistics sector continues to struggle to fill driver vacancies with those planning to increase headcount in the next 12 months its lowest-ever level
  • The shortage of skills and drivers continues to be the most important issue for logistics firms, according to 43.2% of survey respondents
  • Nearly half of operators say their business has committed to lower levels of investment or put investment decisions plans on hold because of Brexit
  • A majority (62.4%) of companies with EU customers fear that a no-deal Brexit will result in less business
  • While the sector would generally prefer an agreed deal between the UK and the EU, views on the preferred type of future trading arrangements vary widely within the sector
  • Value-added services and building personal relationships with customers are seen as key to winning new contracts
  • System upgrades are the main technology focus, but the sector is showing increasing interest in automation to solve workforce shortages
  • More than two thirds of businesses say they will be investing in sustainable, environmental or ‘green’ projects in the next 12 months.

Respondents see most potential in the continuing growth of e-commerce and in the food and beverages sector with the more agile operators being most likely to benefit from changing market conditions.

The report also points to the ongoing resilience of the logistics sector with total revenue for the 100+ survey respondents standing at £17.2bn – and with more than half (55%) saying they still expect to increase profits over the next 12 months.

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