Can UK logistics avoid a looming crunch?
Despite jaunty headlines about rising confidence, the underlying fundamentals suggest the delicately balanced UK supply chain sector could be facing a tough year ahead
THE UK logistics sector is facing a tough year ahead with business conditions deteriorating amid greater competition and fears of a so-called hard Brexit.
Ninety per cent of the goods coming into and out of the country arrive by southern ports, which are congested and slow.
Shippers compete to secure cheap, but limited, rail freight space to carry container cargoes from southern ports to northern depots, before redistributing to a warehouse for local delivery.
Cargoes that miss out on rail freight must be trucked across the country, adding to overall cost of delivery, road congestion and environmental pollution.
The delicate balance of just-in-time supply chains could be upset should Brexit negotiations introduce delays and extra costs from routine customs checks at ports as part of any transitional customs arrangement.
The UK Chamber of Shipping has led a campaign to prevent ‘operation stack’ on the UK’s roads and to keep goods flowing post-Brexit. With an overhaul of ports technology needed, alongside infrastructure upgrades to road and rail, there are clear challenges ahead.
Any restrictions on employment from the European Union and free movement of people will also increase pressure on an under-resourced trucking industry, with British road hauliers already facing a lack of skilled drivers and staff.
Meanwhile, businesses along the supply chain are being squeezed. UK ports have to compete on cost domestically and with large European hubs such as Rotterdam and Hamburg, which can undercut UK operations through cheap port fees and regular daily feeder services.
UK logistics firms expect to continue to be squeezed on pricing, with simply too much capacity chasing too little freight, according to the UK Logistics Confidence Index, published by a Barclays Bank and accountants Moore Stephens.
And there is a ticking time bomb when it comes to available storage. The supply of warehousing in the UK has fallen by 72% since 2009, the report found.
Can the shipping industry help solve these pressing issues? Our Tuesday October 10 panel debate in Liverpool will consider what can, and should be done to benefit shippers, freight forwarders and ocean carriers alike.