Over 75% of transport and logistics businesses confident of growth over next three years

John Simkins, our Head of Transport and Logistics, gives his take on the results of the latest Trade Barometer in relation to this fast-moving sector.

Transport and logistics

The latest edition of the Santander Trade Barometer reveals more than three-quarters of the UK’s transport and logistics businesses are confident they will grow over the next three years – a greater proportion than in any other sector of the British economy.

This optimism is testament to the resilience and can-do attitude that characterises the industry. But I think it is particularly impressive and noteworthy given the challenges that transport and logistics firms face at present.

Our research suggests the most keenly felt of these challenges is the general economic outlook for the UK: more than half (53%) of transport and logistics companies expect a domestic slowdown to have a negative impact in the 12 months ahead, while the same proportion are concerned about potential interest rate rises in 2018.

Transport and logistics businesses are some of the biggest purchasers of capital equipment across the economy; they are also among the most likely to rely on support such as working capital facilities or invoice finance for day-to-day funding.

Expansion plans

It is clear from the Trade Barometer that staffing and productivity issues remain high on the agenda for the sector. When it comes to plans for growth over the coming year, the vast majority of transport and logistics firms – at 86%, the highest proportion in any of the industries surveyed – say they would like to hire more staff.

Meanwhile, just under half (49%) of respondents report an intention to move to new premises in 2018 as changing demands from both retail and industrial clients cause logistics providers to move from national distribution centres to more regionalised models. But the question is, does Britain have the infrastructure and warehousing capacity to make this dream a reality?

Preparing for Brexit

Another important part of this round of research looked at how transport and logistics businesses are preparing for Brexit. Less than half (46%) of those we talked to said that they had started planning for the post-Brexit future, a figure that is broadly in line with the rest of the economy.

Of those who had started looking at contingencies, the most common approach (70% of businesses) has been scenario planning for the potential Brexit outcomes, while a majority (56%) have started investing in solutions to deal with possible disruption and the same proportion are looking at the legal implications of relocating staff from the UK.

Clearly, transport and logistics is a wide-ranging sector and certain firms will be affected to a much greater degree by Britain’s exit from the Customs Union, for example, than others. But even though the future is uncertain, starting some form of long-term planning is crucial.

A good place to begin is by carrying out a business self-diagnostic, which should include knowing the proportion of exports inside and outside the EU, quantifying all costs along the supply chain and understanding the proportion of EU nationals in the business as well as future skills needs.

There are other steps businesses can take to help themselves such as seeking World Customs Organisation accreditation as an Authorised Economic Operator: firms that are AEO compliant get a much easier ride through customs. This Trade Barometer, like other recent editions, suggests transport and logistics firms are starting to recognise the global opportunities that are out there. It is important they start to prepare for them to maximise business success.

Read about how we keep things moving for our Transport & Logistics customers.

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