Confidence in the UK logistics sector falls to lowest level
Assessing the expectations of over 100 senior decision makers in the logistics industry, Barclays and BDO’s Logistics Confidence Index reports that confidence in the UK logistics sector has fallen to its lowest ever level.
Falling to 47.1 in 2020 - compared to 49.7 in 2019 - the confidence index for the UK has continued on its downward trend over the last few years, with 2020 reporting its lowest level since the survey began in 2012.
The two organisations attribute the fall in confidence due to the unprecedented domestic and global uncertainty due to COVID-19, as well as the ongoing concerns relating to Brexit.
“2020 has been an unprecedented year – never has the industry faced such a plethora of multi faceted challenges. However, longer term this is an extremely resilient sector which is ready to bounce back once the pandemic passes. Businesses are using this challenging period to build back better, by investing in technology and sustainability. The present is undoubtedly tough, but we can look to the future with optimism,” commented Ian Cranidge, Head of Transport & Logistics at Barclays Corporate Banking.
However, the index reportedly masks the high degree of varying views depending on the sectors respondents are most exposed to:
- One third of operators reported that current business conditions as either the same or more favourable than 12 months ago
- Those focused on e-commerce and last-mile deliveries fared relatively well
- Those operating in manufacturing and energy sectors saw unprecedented levels of disruption
Similar results were discovered when asked which industries would provide the greatest opportunities in 2021. 55% said online retail, 32% manufacturing and 6 per cent said automotive.
“As we stand today, it feels like we are still in the eye of the storm in terms of uncertainty. Given this, it is no surprise confidence is low. The pandemic highlighted the vital nature of an effective supply chain, and this survey demonstrates the sector’s resilience and adaptability. Encouragingly, the responses reveal a continued appetite to invest for the future - searching out new markets and added value services, developing technology, automation and sustainability projects, and attracting, training and retaining good people,” added Jason Whitworth, Partner, M&A Advisory and Logistics & Supply Chain Management at BDO LLP.
FedEx is Reshaping Last Mile with Autonomous Vehicles
FedEx is embarking on an expanded test of autonomous, driver-less delivery vehicles to develop its last-mile logistics.
The US logistics firm piloted autonomous vehicles from Nuro in April this year, and the pair will now explore that further in a multi-year partnership. Cosimo Leipold, Nuro’s head of partnerships, said the collaboration "will enable innovative, industry-first product offerings that will better everyday life and help make communities safer and greener".
FedEx will explore a variety of on-road use cases for the autonomous fleet, including multi-stop and appointment-based deliveries, going beyond more traditional applications of the technology in single-route movement of goods from A-B. Exponential growth in ecommerce is spurring its broader experimentation in new autonomy solutions, Fed-Ex says, both in-warehouse and on-road.
“FedEx was built on innovation, and it continues to be an integral part of our culture and business strategy,” said Rebecca Yeung, Vice President, Advanced Technology and Innovation, FedEx Corporation. “We are excited to collaborate with an industry leader like Nuro as we continue to explore the use of autonomous technologies within our operations.”
The changing role of couriers
Unlike structured delivery networks, operating under long-term partnerships and contracts, agility is where couriers deliver true value - and their ability to deftly solve last-mile fulfilment has most acutely been felt during the pandemic. For the billions of people around the world forced to stay at home to protect themselves and their communities from the spreading COVID-19 virus, couriers have been a constant. They may have been the only knock at the door some people experienced for weeks or months at a time.
But the last-mile has been uprooted by a boom in ecommerce, a shift that has been most apparent in the UK, US, China and Japan, according to the Global Parcel Delivery Market Insight Report 2021 by Apex Insight. These are markets with dominant economies and populations used to running their lives with a tap of a screen or double-click of a mouse.
“Getting last mile delivery right has long been a challenge for retailers,” says Kees Jacobs, Vice President, Consumer Goods and Retail at Capgemini. “In 2019, 97% of retail organisations felt their last-mile delivery models were not sustainable for full-scale implementation across all locations. Despite increasing demand from customers, companies were struggling to make the last mile profitable and efficient.”
Jacobs says that the pandemic alleviated some of these stresses in the short term. With no other option, consumers were understanding and tolerant, if not entirely happy, with longer delivery times and less transparent tracking. “But, as extremely high delivery demand continues to be normal, customers will expect brands to contract their delivery times,” he adds.
Last mile's role in ESG
Demand and volume weren’t the only things that have changed during the pandemic - businesses looked closer to home and as a result became more sustainable. Bricks and mortar stores were transformed from mini-showrooms to quasi-fulfilment centres. Online retailers and other businesses sought local solutions to ship more faster. In densely populated London, UK alone, Accenture found that delivery van emissions dropped by 17%, while Chicago, USA and Sydney, Australia saw similar emissions savings.