CSCMP's Supply Chain Quarterly
December 16, 2017
Supply Chain Executive Insight E-Newsletter
Each week the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
Sign up now!

Most Read Articles

News from our sister publication
DC Velocity
Forward Thinking

Logistics providers in the United Kingdom express pessimism about sector's outlook

Comment
Survey finds leaders worried about pricing pressure, higher costs, impact of possible "Brexit."

Logistics providers in the United Kingdom were more pessimistic about the U.K. logistics sector's outlook during the first half of 2016 than at any time in the past four years, according to a survey released Tuesday by Barclays Bank PLC and U.K. consultancy Moore Stephens International Ltd.

The biennial survey, the eighth conducted since the survey began in 2012, found that the logistics "confidence index" dropped in the first half of the year to 51.8, a 10.1-point decline from the second half of 2015 and the largest sequential decline in the survey's history. Nearly half of all respondents reported that the operating climate was more difficult than just six months prior, a significant increase from similar readings of the year before. About 47 percent expect conditions to worsen over the near term, according to the survey.

Several factors conspired to produce the gloomy outlook. The most notable was intensified pricing pressure, both from more demanding shipper customers and from an increase in provider competition, according to the survey. About 49 percent of respondents said an inability to gain pricing power was the biggest short-term challenge facing their businesses. For the survey's first few years, problems finding qualified labor had been the biggest challenge cited by respondents.

Respondents also cited higher costs, saying that declining fuel prices have been more than offset by the rising costs of insurance, vehicles, technology, and driver wages. Finally, uncertainty over the outcome of the June 23 referendum on whether Britain should remain in the European Union is weighing on the sector's prospects, the survey said.

About 35 percent of respondents said they are looking at acquisitions to increase their service portfolios and achieve better economies of scale. About 16 percent are investing in new IT applications, while 24 percent are rolling out "value-added" services such as last-mile deliveries, returns management, and light assembly to win and keep business, the survey said.

In what has become a common narrative in such surveys, most of the respondents expect their own companies to perform better than the overall market. About 70 percent expect their companies to report higher revenues over the next 12 months. About 52 percent expect to report higher profits, reflecting the host of concerns confronting them.

About 100 top U.K. logistics executives participated in the survey.

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2016: Logistics providers in the United Kingdom express pessimism about sector's outlook"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.