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UK Logistics sector may be down, but certainly not out!

The UK logistics industry is beset with pessimism, according to a new survey showing the confidence index at 47.1 – its lowest level since records began in 2012. The Barclays-BDO Logistics Confidence Index notes the “unprecedented domestic and global uncertainty created by the pandemic, in addition to ongoing concerns over the UK’s future relationship with the EU and the continuing skills shortages”. Two-thirds (67.1%) of companies say current business conditions are more difficult than 12 months ago, while a quarter (24.2%) believe they are “much more difficult”. The survey suggests larger companies have generally found things more difficult, despite being more likely to benefit from a more diverse customer base, as they may have found it harder to adapt quickly to the changing market. However, Brexit and the driver shortage are the most pressing concerns, notes the report accompanying the survey. “The industry seems to be experiencing a mixture of nervousness and calm towards Brexit transition. While operators’ attitudes are perhaps slightly more relaxed about – or perhaps simply resigned to – Brexit than last year, possibly because they feel more prepared, nearly half (47.9%) still fear they will be doing less business with EU companies in the event of no trade deal being agreed.” The lack of drivers, meanwhile, has been compounded by a shortage of skilled warehouse staff. But, there are some bright spots – namely in e-commerce. One-third of operators said current business conditions were the same or better than a year ago, with those in e-commerce and last-mile delivery faring better than others. But manufacturing sectors such as automotive, aerospace, oil and gas saw “unprecedented levels of disruption”. The greatest business opportunities in 2021 are predicted to be in online retail (55%), against 32% for manufacturing and just 6% for automotive. But opportunistic acquisitions are also on the cards, with nearly 40% of respondents saying they are likely to make an acquisition in the next 12 months as companies try to extend service offerings or target new industries or customers. Technology has also seen greater adoption, with 42% of operators using technology to replace humans. And Covid-19 hasn’t battered environmental hopes: 72% say they will continue to invest in green projects over the next year. “2020 has been an unprecedented year – never has the industry faced such a plethora of multifaceted challenges,” said Ian Cranidge, head of transport & logistics at Barclays Corporate Banking. “However, longer-term this is an extremely resilient sector, which is ready to bounce back once the pandemic passes. Businesses are using this challenging period to build, by investing in technology and sustainability. The present is undoubtedly tough, but we can look to the future with optimism.” The total combined UK revenue for the 100+ companies surveyed is £16.4bn ($21.95bn) and, even under current conditions, nearly half (49%) still expect to see profits increase over the next 12 months. Jason Whitworth, partner, M&A advisory and logistics & supply chain management, at BDO, said: “As we stand today, it feels like we are still in the eye of the storm, in terms of uncertainty. Given this, it is no surprise confidence is low. The pandemic highlighted the vital nature of an effective supply chain, and this survey demonstrates the sector’s resilience and adaptability. “Encouragingly, the responses reveal a continued appetite to invest for the future – searching out new markets and added-value services, developing technology, automation and sustainability projects and attracting, training and retaining good people.” Source The Loadstar

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Decision to halt HGV driver tests will disrupt peak season, industry warns

The Logistics Skills Network (LSN) has slammed the DVSA’s decision to suspend HGV driver testing and training during the government’s latest four-week lockdown in England, which began last week. The LSN, whose members train around 40% of all HGV drivers each year, is warning that the decision will add thousands more delayed tests to the existing backlog of 20,000 delayed HGV tests created by the previous lockdown and exacerbate the HGV driver shortage in the middle of the logistics industry’s peak period. In a letter sent to DVSA chief executive Gareth Llewellyn, the LSN calls for the suspension of testing and training to be reversed “immediately”. The letter, written by LSN chairman David Coombes, argues that nothing in the Statutory Instrument (SI) regulations approved by Parliament to enable this latest lockdown legally requires HGV driver training and testing to cease. He adds; “In fact, quite the opposite. The SI makes a specific exception to the lockdown regulations where the purpose is education and training. Clearly the training of vocational drivers falls under this category and is therefore exempt.” The letter, which has also been copied to DfT minister Baroness Vere of Norbiton and Conservative MP Huw Merriman, also warns of the damage the suspension of HGV training and testing will have on the haulage industry and the wider economy. Pointing out that the suspension of testing in the first pandemic lockdown had created a backlog of around 20,000 HGV tests, Coombes warns that applying the same suspension across the second lockdown will create a further backlog of around 6,000 HGV tests which, he adds, will have “serious consequences for the economy just when the logistics industry is gearing up for peak. By the end of the four-week lockdown we will have lost the capacity to deliver 40,000 tonnes of food, medicinal supplies and other freight every day.” The RHA also voiced its concern this week. Tom Cotton, RHA head of policy for England and Wales, said any suspension of HGV driver tests will exacerbate the severe shortage of HGV drivers in the UK. He said: “When vocational testing is suspended this only compounds the driver shortage in this country, which currently stands at a shortfall of around 60,0000 drivers, and creates additional problems for our members.” DVSA has yet to respond to a request from the source, motortransport.co.uk for comment.

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“Work with us to improve HGV facilities,” government urges industry

The government has encouraged the industry to respond to plans to overhaul the country’s outdated planning system and explain how “high quality” lorry parking facilities should be provided. In a response to a petition demanding that councils are forced to include “safe and secure HGV parking with refreshment and washing facilities for drivers” when deciding distribution park applications, it said it was considering “innovative ideas” to improve HGV parks. The Ministry of Housing, Communities and Local Government (MHCLG) said: “As part of our wider agenda for planning reform, we have published our Planning for the Future proposals for reforms to the planning system. “We are consulting on these proposals until 29 October, and would welcome views on planning for high quality HGV facilities as part of that.” The MHCLG said it recently introduced policy that local plans and decisions should recognise the importance of adequate overnight lorry parking facilities: “Consequently, proposals for new or expanded distribution centres should include provision for sufficient lorry parking to cater for their anticipated use,” the department responded. “This policy is set out in our National Planning Policy Framework. “This must be taken into account when local authorities are preparing their local plans and is a material consideration in planning decisions.” Transport Secretary Grant Shapps recently wrote to the RHA chief executive, pledging to improve overnight HGV parking facilities as part of the Covid-19 recovery plan. In the letter, Shapps said his department was “committed to looking at both established and new approaches to increase the provision for improved overnight lorry parking in England.” The Planning for the Future consultation can be accessed here: https://www.gov.uk/government/consultations/planning-for-the-future

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UKWA is rolling out a new digital self-audit tool to help the warehouse and logistics industry to up its game.

Covid-19 has changed the world for everyone, but most certainly for those of us in the warehousing and logistics industry. The pace of online spending has accelerated exponentially, with internet shopping now representing an astonishing 32.8% of total consumer spend according to latest ONS statistics. As we’ve noted for some time at UKWA, logistics has become the new retail, and this rapid transformation is bringing us as logistics providers and warehouse operators ever closer to the consumer. While this creates great opportunities for growth, there are significant challenges ahead too. To survive in this fast-moving, demanding environment, and to operate efficiently, sustainably and profitably, it will be essential that businesses ensure compliance and manage risk. Many of our larger members already have compliance and good governance at the heart of their business – particularly if they deal with hazardous substances, food or other sectors where demonstrating compliance is a given, but for many SMEs this is new territory. The pandemic has given rise to a specific set of required standards that businesses must now adhere to, regulations which seem to change with every new government announcement. Brexit – now only a matter of working weeks away – will doubtless generate still further new demands. Now is the time for our industry to take a more strategic view and step up our game. Only by understanding and continually monitoring processes and performance can businesses manage risk, commit to a culture of continuous improvement, and deliver a service that is fit for purpose. To support our members on this journey, UKWA is rolling out a new digital self-audit tool, developed in partnership with rradar, a specialist law firm with deep experience in the field of compliance and regulatory issues, with the technical expertise to build a digital solution based on our legacy audit, designed to reduce commercial and legal risk. The new tool, which has been piloted by members of the UKWA management board, will provide members with their own governance platform, identifying areas that need attention at strategic, operational and ground level across all key business functions, also providing a central repository for all governance, compliance and insurance documentation. This is an important milestone for the Association, replacing as it does the previous ‘MOT’ type audit with an extremely flexible digital solution, designed to keep businesses compliant and protected from risk on an ongoing, real-time basis. Part of our mission as UKWA is to drive up industry standards. Not policing those standards, but rather helping professionalise our industry by facilitating continuous improvement and supporting our members in managing their businesses more effectively, equipping them to operate successfully in the future, fast-changing digital world. Peter Ward UKWA, CEO

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