Transport & storage companies experience fewer challenges this month, but retailers struggle

Transport & storage sector companies, a category that includes logistics, couriers and home delivery firms, have reported fewer challenges to their business than any other industry sector in the first half of this month.

Today’s Office for National Statistics (ONS) Business Insights report reveals that, for the period 5-18 August, a considerable 52.3% of transport & storage sector companies reported they were not currently experiencing any challenges. That’s higher than any other industry sector, with just 19.4% of retailers and 26.5% of manufacturers reporting no issues, says the home delivery expert Parcelhero.

Parcelhero’s head of consumer research, David Jinks MILT, says: ‘It’s been a rocky road for transport & storage sector companies over the last few years, as they deal with the fallout from Brexit and global supply chain upheavals. Happily, it looks as if this month, the industry is enjoying a period of relative calm; far more so, in fact, than their retail partners.

‘A sizable 52.3% of transport & storage sector companies – a category that includes logistics, freight, mail, couriers, distribution and warehousing firms – reported no particular challenges in the first half of this month. That’s notably calmer than last summer, when only 44.4% of transport sector companies reported no challenges.

‘This month, competition from rival companies topped the list of challenges for those transport & storage companies who did report problems. 21.4% named competitors as their main challenge. It’s true that competition for logistics contracts is fierce, with a number of high profile manufacturers and retailers switching to rival third party logistics (3PL) companies, particularly in automotive and retail. There has also been considerable upheaval in the courier industry, with a number of big names changing ownership and refocusing.

‘Next came economic uncertainty, a concern for 17.3% of transport & storage companies, followed by financial costs, a worry for 15.6% of firms.

‘In contrast to their logistics and delivery partners, retailers had a far more turbulent start to August. Only 19.4% of retailers reported experiencing no challenges, with a huge 31.9% of wholesale & retail sector companies reporting economic uncertainty was the biggest challenge they face. It’s been a  patchy summer so far for the High Street and that is reflected in these findings.

‘A total of 29.7% of retailers named competition as their second biggest challenge, as summer discounts started early this year. Among other concerns, 23% named insufficient domestic demand for their products as an issue, and a sizable 10.5% were worried about weather conditions – a higher result than even the construction sector. Certainly the damp summer won’t be helping to encourage footfall.

‘In manufacturing, insufficient domestic demand was the biggest headache for companies. 27% of companies expressing concern, followed by competition from rival companies at 22.7%.

‘August so far seems to have thrown fewer challenges at transport & storage companies than other industries. However, the sector does not operate in a vacuum. Issues impacting retailers and manufacturers will bite their transport partners further down the line, as struggling companies strive to lower their costs. However, for now, many companies will doubtless embrace the calm.

‘One certainty is that it will be those retailers with strong in-store and online sales that will ultimately triumph in a post-Covid world, supported by their transport & storage partners. Parcelhero’s influential report “2030: Death of the High Street” has been discussed in Parliament. It reveals that retailers must develop an omnichannel approach, embracing both online and physical store sales. Read the full report at: https://www.parcelhero.com/content/downloads/pdfs/high-street/deathofthehighstreetreport.pdf