Business, Freight News, Logistics

UK logistics lags behind says FTA report

[ May 10, 2019   //   ]

The UK’s global competitiveness has dropped significantly and investment transport and logistics is urgently required to boost its attractiveness to international investors, according to a new Freight Transport Association (FTA) report released on 9 May. The 2019 Logistics Report, launched by FTA in association with Santander Corporate and Commercial Banking, polled over 500 freight and logistics businesses operating in the UK and internationally.

FTA director of UK policy, Elizabeth de Jong, commented: “With Brexit set to change the face of our trading environment in the UK, this year’s Logistics Report has found that UK’s global competitiveness is deteriorating.  Quality of infrastructure is a key priority for any business looking to invest in the UK, but this has been weakening for several years due to underinvestment in the road network, rocketing fuel prices, limited accessibility to all forms of transport, and an overall lack of innovative transport solutions.”

According to the 2018 Global Competitiveness Report published by the World Economic Forum, the UK is now the eighth most competitive nation, a drop of two places since 2017. It ranks 29th for road connectivity and 26th for road quality. And another report by Ernst & Young confirmed that the UK’s transport and logistics infrastructure has become less attractive to investors, with an attractiveness score of 62% in 2018, a long way below its previous high of 80%.

Ms de Jong continued: “Reducing logistics costs is often the number one priority for a businesses’ bottom line. However, with profit margins of only two per cent in 2018, logistics companies are very vulnerable to increases in operating, fuel and freight costs. As a low margin activity, we need to see new thinking and innovative solutions to ensure the UK can offer the highly competitive conditions that draw international companies to our shores, while also supporting homegrown businesses.”

The survey also found that the uncertainty over Brexit was taking its toll on the logistics industry, with 61% of respondents saying this uncertainty is a barrier to the growth of their businesses internationally.

De Jong continued: “With no firm progress made on the withdrawal negotiations, FTA is continuing to advise its members to prepare for the worst-case scenario: a No Deal Brexit. Respondents to this year’s survey are most concerned about the impact this outcome would have on customs obligations; the employment status of their EU workers; access to non-UK workers; and the potential lack of permits for cross-border movements.

While the industry is prepared to work through the challenges a No Deal Brexit would undoubtedly bring, FTA is calling for negotiators to keep working towards an acceptable solution for both parties.”

Santander UK head of transport and logistics, John Simkins, commented:

“Uncertainty has been the inevitable reality for UK businesses over the last year, especially for those operating in transport and logistics.

In order that UK businesses can continue their operations with as little disruption as possible, it is vital that we work closely with the transport & logistics industry. The importance of the sector must not be undervalued, which is why we remain committed to continuing our work with the FTA and businesses in the sector in 2019 and beyond.”