7 /10 logistics firms expect turnover to increase
June 29, 2018
Precision Search's Logistics consultant, comments on the findings from a recent article featured in East Midlands Business Link.
"The latest UK Logistics Confidence Index from Barclays and Moore Stephens has revealed that confidence amongst senior members of the UK's logistics sector is at its lowest level since the biannual survey began in 2012. The Index does however stand at just above its critical *50.0 mark."
The article goes on to say:
"Optimism in H1 2016 has fallen significantly to 51.8 compared to 61.9 in H2 2015. This fourth successive drop is the largest that this biannual barometer of levels of confidence in the sector has recorded and takes it to its lowest point in its four-year history.
Yet, perhaps surprisingly given the low levels of confidence, almost 7 in 10 expect their turnover to increase in the next twelve months and the same number feel sufficiently confident to be planning to invest in capital expenditure over the next six months.
The index reports that logistics businesses are facing increasing pressure from customers for lower prices during a period of rising competition and increases in costs. To respond, logistics businesses are increasingly focusing on value-added services and technology as a route to retaining existing clients and to attract new business.
The development of value-added services was most commonly cited as an opportunity for the sector and a key driver of contract wins. With 24% of respondents highlighting the trend, this represents a threefold rise on H1 2015.
Respondents identified offering value-added services such as last-mile delivery, co-packing, returns management services, labelling, pre-assembly or even basic manufacturing as a way to establish long term customer relationships based on value.
Technology is also seen as an opportunity for the sector, cited by 16% of respondents, double the number who said this in H2 2015 as the sector seeks to realize the cost, service level and efficiency benefits on offer through cloud services, digital tracking technology and the insights available through big data analytics.
Ray O'Donoghue, managing director at Barclays in the Midlands, said: "Confidence in the UK logistics industry has taken a knock from price pressure and increasing competition. Under such pressure, the high level of planned capital expenditure is welcome news and reflects the sector's pressing need for investment in technology. It is also encouraging that the role of technology is recognized as a route to both control costs and improve service levels and investment in this area is a key trend for the sector".
Specialist Senior Logistics Consultant comments on the article findings:
"As someone who speaks to Logistics & Supply Chain Leaders on a daily basis, there is definitely more of an emphasis on end-user customer experience and "value added" services.
Due to the onset of technology, the rise of competition and the fact that the millenial demographic spending power has rapidly increased, the businesses that don't improve their customer's end-to-end experience will get left behind.
This is especially prevalent in the areas of E-commerce, Home Delivery and Parcels as the drivers/drivers mates who deliver the service to people's homes need to ensure exemplary white glove customer service at all times.
Businesses are increasingly looking to hire people with strong Lean & Six Sigma skills into their Supply Chains to reduce cost and improve efficiencies elsewhere so that they have the capital to invest properly into providing that strong end user experience later on in the Supply Chain."
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