Short termism stunting innovation in logistics sector, report says
UK logistics businesses are optimistic about the future but a focus on cost cutting and sticking to core business is restricting innovation, according to research from Barclays and accountancy firm Grant Thornton.
The newly launched UK Logistics Confidence Index, which includes a survey of key decision makers from the UK logistics industry, shows that although the majority of businesses plan to invest over the next six months, they continue to tackle the same on-going issues leaving innovation to take a back seat.
When asked what the biggest concern is facing logistics businesses over the next six months, one third of respondents cite margin pressure as the greatest challenge on their business followed by fuel costs (20%).
Surprisingly only 15% of respondents are concerned by eurozone uncertainty.
Although faced with cost pressures, there is optimism in the industry. More than three quarters of businesses surveyed view current business conditions as somewhat difficult (65%) or very difficult (13%), with 48 per cent foreseeing conditions to be the same over the next six months.
A quarter of respondents see things improving this year, with 53% expecting an increase in profit over the next six months.
Ian Wilson, Grant Thornton corporate finance partner based in Birmingham, said: “Given the significance of the manufacturing sector to the Midlands economy, these messages will resonate loudly with regional logistics operators supporting the numerous suppliers to the aerospace and automotive sectors.”
Rob Riddleston, head of transport and logistics at Barclays, added: “The continuing economic climate is providing the logistics industry with challenges and whilst some recognise the need to innovate, the day-to-day pressures make this difficult to achieve.
“However, it is pleasing to see that there is an air of optimism in the industry with logistics businesses seeing a brighter future over the next six months.”
