Wednesday, June 26, 2019

Freight Transport Report Reveals Some Key Facts on Logistics Trends and Brexit

Statistics and Opinions Revealed as FTA Man Assists With Irish Border Problem
Shipping News Feature
UK – Earlier this week, the Freight Transport Association (FTA) released its 2019 Logistics Report which found that declining profit margins have left logistics businesses struggling to fund their Brexit preparations. As uncertainties surrounding Brexit take their toll on the sector, Seamus Leheny, Policy Manager for Northern Ireland at the FTA, has been named as a member of the Department for Exiting the European Union's (DExEU) Business and Trade Union Alternative Arrangements Advisory Group. Commenting on his new appointment, Leheny said:

“As the organisation representing the logistics sector, it is essential the FTA’s voice is included in any major discussion on the UK’s departure from the EU. So many businesses and individuals’ jobs are dependent on the continued free movement of goods crossing the border in both directions, but the lack of progress shown by politicians in sorting future arrangements in Ireland are at the heart of the stagnation of Brexit talks.

“On any given day, more than 13,500 goods vehicles cross just six of the 300 border crossings in Ireland, with the majority of freight being intermediate goods that are an integral part of all-island supply chains. My role in this group will be to work to preserve seamless business links between Northern Ireland and EU27 countries especially the Republic of Ireland in any Brexit negotiation, and protect the interests of those organisations that we represent, as well as the wider Northern Irish economy.”

Brexit-related political chaos and its impact on industry related businesses and the wider economy was the main takeaway from this year’s Logistics report. Launched by the FTA in association with Santander Corporate and Commercial Banking, the report polled the opinions of more than 500 freight and logistics businesses operating in the UK and internationally, to provide industry insight into the latest political and economic developments.

The survey, conducted at the beginning of the year, before the initial Brexit deadline day of March 29 changed, indicated that the uncertainties surrounding the UK's exit of the EU are taking their toll on the logistics industry, with 61% of respondents saying this uncertainty is a barrier to the growth of their businesses internationally. Elizabeth de Jong, the FTA’s Director of UK Policy, commented:

“The FTA represents the interests of 17,000 logistics businesses; declining profit margins have left them struggling to fund their Brexit preparations. Profit margins were only 2% in 2018, making any significant financial investment very difficult to justify for any business, especially when the international trading landscape post-Brexit is still to be determined, logistics companies simply do not know what they should be planning for. It is of no surprise, then, that at the time of the survey (January 2019), 37% of respondents had not taken any action to prepare for Brexit and only 17% had created a plan for a No Deal Brexit.

“Logistics businesses are also concerned about how the UK’s departure from the EU will impact their workforce; 80% of respondents say the employment status of EU workers is their most pressing Brexit challenge. 13% of HGV drivers currently working in the UK are EU nationals; the continued residency of these workers is not guaranteed post-Brexit. FTA is campaigning for amendments to the Future Immigration White Paper, so non-UK logistics workers are welcomed in the UK, to help address the worsening skills shortage.”

The report also found that the UK’s global competitiveness has dropped significantly and investment in the UK’s transport and logistics infrastructure is urgently required to boost its attractiveness to international investors.

Brexit and its impact was but a small part of the report with the more positive achievements of logistics in the past year overshadowed. The wider logistics industry added around 200,000 jobs, mainly in occupations related to storage and warehousing, though there was a significant fall of 37% in the number of logistics apprenticeship starts. There was a continuation in the downward trend in fatal accidents per vehicle kilometre for both HGVs and vans, and around 1.86 million potholes were filled in during 2018/19.

UK trade in goods consisted of £350 billion in exports and £488.8 billion in imports in 2018. The EU accounted for 54.4% of UK goods imports and 48.8% of UK goods exports in 2018. Exports of goods to non-EU countries from the UK rose 2.6% to £179.2 billion in 2018.

Air quality has become a significant area of concern and policy development in government over the past few years, both in response to legal action compelling it to act on vehicle and other emissions and inter-governmental debates. Unfortunately air quality forecasts for 2019 show that 24 out of 28 UK urban areas will exceed legal limits for nitrogen dioxide. Last year saw five UK cities directed to investigate the introduction of Clean Air Zones to combat air pollution.

30% of respondents to the Survey indicated they were considering using alternative fuel sources for their van or HGV fleets in 2019. Of those who intend to use alternative fuels, the majority (71%) will use electricity (for use by Battery Electric Vehicles) for van fleets, with natural gas and biodiesel the top choice for HGV fleets, chosen by 47%.