Staying on the move despite disruption

The transport and logistics industry continues to play a vital role in helping the UK cope with the coronavirus pandemic, making sure vital supplies reach their destinations. But the picture both in the UK and internationally is changing on an ongoing basis.

In the road transport sector, the Department for Transport (DfT) has now announced a further relaxation of the rules on drivers’ hours (initial measures were introduced in March), including an easing of the European Union’s Drivers’ Hours regulation. The new rules came into effect on 8 April and will remain in force until at least 22 April.

On the UK rules, the key points include increases in the daily duty limit (from 11 hours to 12 hours) and the daily driving limit (from 10 hours to 11 hours). Drivers are only permitted to take advantage of this relaxation on five days in any seven-day period, and must take a rest period of 24 hours within the same seven-day period when using the concession.

On the EU regulation, the daily driving limit has been increased from nine hours to 11 hours. While the daily rest requirements have been reduced to nine hours from 11 hours. There are also increases to weekly and fortnightly driving limits: from 56 hours to 60 hours and 90 hours to 96 hours respectively. In addition, changes to the start of weekly rest periods take these to seven days rather than six, and the daily break rules now require a break of 45 minutes after five-and-a-half hours of driving.

These changes are intended to help the sector keep critical goods moving. But the DfT, along with the Freight Transport Association, the Road Hauliers Association and the trade union Unite are keen to stress that businesses must not compromise health and safety. The relaxations should only be exploited when absolutely necessary and are aimed at those distributing vital goods.

International travel disrupted

Santander stands ready to support businesses with international supply chains as the environment continues to change day by day. We work with a number of logistics partners that specialise in particular sectors or markets; many are happy to share their expertise on potential solutions to supply chain problems.

The issues vary by industry, by geography and by mode of transport. In shipping, while manufacturing output in China is once again increasing, getting goods out of Asia into Europe and the US remains challenging, with lockdowns in the West limiting demand and, as a result, scheduled sailings being cancelled. For UK businesses reliant on imports from Asia, this will reduce choice, both of shipping line and port. That may increase costs even though spot rates on Asia to Europe routes remain low; the pressure will intensify as capacity in Asia increases.

For now, rates on routes from Europe to Asia and the US remain relatively stable, courtesy of blank sailings following the lockdown in China and a significant increase in air freight rates, which has seen shippers look to sea freight instead.

In air transport, the continued fall in passenger numbers has had a severe impact on the UK’s main airport handling companies. All have taken measures to protect their staff and business. Freight-only flight numbers from UK airports have increased, but the overall volume of air freight has fallen significantly because of cancellations of scheduled passenger flights, which carry a large proportion of freight. For UK companies using air freight, this may mean higher handling costs to come.

More positively, more airlines, including British Airways, are starting to run freight-only flights in their scheduled slots, as demand for medical equipment, devices and other critical supplies drives up demand.

Help for exporters

UK Export Finance has extended the scope of its export insurance, which enables exporters to insure against non-payment when selling their goods internationally. The insurance covers up to 95% of the value of exports to countries covered by policies. The European Union, US, Australia, Japan, New Zealand, Norway and Switzerland have all now been added to the scheme.

The UK government has also published advice on regulation introduced by its French counterpart covering anyone entering France. Anyone now doing so must produce an international travel certificate, with the procedure covering those transporting goods into France as well as other visitors.

• To discuss how Santander can help your business during the coronavirus pandemic, please contact: issinsights@santander.co.uk