The logistic sector: Positive despite Brexit uncertainty
Despite upcoming Brexit uncertainty, reports show that as many as three quarters of logistics companies are confident that their business will grow over the next three years.
Based on the opinions of more than 370 freight and logistics businesses, operating in the UK and internationally, this report provided vital industry insight into the latest political and economic developments. It noted that “despite a challenging economic climate, the future looks more positive”.
Elizabeth de Jong, FTA’s director of UK policy, comments: “As we leave the EU, it is vital the UK’s economy remains efficient and competitive internationally. There is much the government can do to help make this happen: investing in road and rail infrastructure; creating a favourable fiscal environment; improving initiatives to address skills shortages; and facilitating cleaner fuels through use of duty differentials while protecting modal choice.”
What are the key challenges in logistic’s future?
Oil prices continue to increase and this could be the most troublesome concern for logistics.
Since December 2017, the price of oil increased by just over 18 per cent to a monthly average of $75.94 a barrel in June 2018.
De Jong continued: “Logistics businesses are facing rising operating costs. The ongoing increase in fuel prices – up 18% since December 2017 – presents a key challenge. While FTA is pleased the government decided not to increase fuel duty in its autumn Budget, we’re disappointed it didn’t take the opportunity to reduce it, given this rise. The report also discovered that operators are struggling with increased warehouse rates and are finding it difficult to pass these increased input costs on to customers.”
It’s rising oil prices and warehouse rates, staff shortages and economic instability that are all presenting the biggest challenges to the logistics industry.
Despite slower than anticipated growth in the economy during the first half of the year, it’s great news that confidence remains high. It becomes ever more clear that transport and logistics companies will be at the forefront of helping UK businesses to overcome the headwinds of Brexit, and help it to prosper at a global level.