THE logistics industry is often used as a barometer to the economy as a whole – the more activity there is, the more goods need to be transported.
Economically, things are moving in the right direction but the industry continues to struggle with a number of issues including over-regulation and is currently coming to terms with the new Driver CPC legislation.
As with all sectors, logistics companies need to remain competitive to survive and news from one of the industry’s major global players, Norbert Dentressangle, which bases its UK headquarters in the county, on its successful $750m ac
THE logistics industry is often used as a barometer to the economy as a whole – the more activity there is, the more goods need to be transported.
Economically, things are moving in the right direction but the industry continues to struggle with a number of issues including over-regulation and is currently coming to terms with the new Driver CPC legislation.
As with all sectors, logistics companies need to remain competitive to survive and news from one of the industry’s major global players, Norbert Dentressangle, which bases its UK headquarters in the county, on its successful $750m acquisition of Jacobson
Companies in the US, makes this all the more real for local smaller, privately owned haulage firms.
They will have to work harder to maintain market share whilst staving off competition, keeping up with customer demands, meeting fuel costs, coping with market volatility and continued margin pressure. No easy task, irrespective of industry confidence.
Steve Robinson, partner and regional head of logistics at financial and business advisers Grant Thornton, said: “Confidence in the UK logistics industry has grown significantly over the last two years although trading remains tough. This is due to price being the major factor in winning business rather than quality of service and value for money.
“However, operators entered 2014 on a strong footing, confident that the wider economic revival would continue to drive demand for logistics services. This momentum was undoubtedly encouraging but the relatively high level of competition in the sector has put continued pressure on margins.”
Often referred to as the logistics and distribution golden triangle, the Midlands is home to 24.5 per cent of all industry companies, with 12.5 per cent of those businesses in the East Midlands. Well positioned to reach 90 per cent of the population within four hours, it’s no surprise that logistics is still a key part of the local economy.
This was reflected in Grant Thornton’s most recent Northamptonshire Limited report, where freight and logistics demonstrated an impressive double-digit increase in turnover of 21.7 per cent and an increase in profitability of 76.4 per cent, albeit from a low base.
Steve Robinson continued: “We hope to see continued growth within the sector next year but this will be dependent on a lot of different outside factors. An increase in red tape is certainly a cause for concern and although the industry seems to have responded well to the mammoth task imposed by the CPC qualification, if the Government introduces more widespread changes, it is likely to have wider, more negative implications for smaller businesses.”
Contact Grant Thornton on 01604 826650 or visit www.grant-thornton.co.uk