Transport & Logistics businesses: Rising to the challenges ahead
Uncertainty around Brexit creates an opportunity for Transport & Logistics companies to help their customers weather coming storms.
Santander’s Trade Barometer 2018 Annual Report paints a picture of a UK Transport & Logistics sector that is confident, yet mindful of the challenges that lie ahead.
The report reveals more than three-quarters (76%) of companies in the sector expect their businesses to grow over the next three years – a figure that compares favourably with the 68% recorded across the whole economy.
Businesses are also optimistic about their investment plans over the next year. The vast majority say they intend to hire extra staff (94%) or buy new equipment (79%) in the next 12 months, figures that have increased significantly since the last edition of the Barometer in the previous quarter. Encouragingly, almost three-quarters (71%) of respondents in the Transport & Logistics sector plan to expand internationally over the next year.
Clouds on the horizon
Still, there are ongoing issues that cloud this optimism: with global geo-political uncertainty, a number of respondents highlighted concerns about currency fluctuations. Transport companies have significant exposure to overseas markets, both through their own operations and those of customers who rely on them as logistics partners for international activity. As such, 46% of the businesses we surveyed highlighted exchange rate volatility as one of the major current risks they face. In this area, it is crucial that companies think about the action they can take to mitigate future risks, for example by taking advantage of the foreign exchange solutions available to them.
The Trade Barometer also identified that businesses operating in the sector remain uncertain of the disruption potentially faced as a result of the UK’s departure from the European Union. However, on a positive note, it is welcome news that businesses within the Transport & Logistics sector are increasingly devoting time and resources to planning for Brexit – 69% say they have done so to date, up from 60% in the last quarter.
Helping customers navigate Brexit
Brexit will bring significant challenges in the short-term at least. There are still a number of question marks over the arrangements that will be in place at the traditional cross Channel transit hubs, as well as what future licensing regulations for UK drivers in Europe will look like.
Transport & Logistics relies heavily on EU nationals within its workforce and businesses are still not certain as to what extent the flow of labour from the Continent will be restricted.
But the fact remains that, whatever the UK’s settlement with the EU turns out to be, Britain will continue to trade with its European neighbours in some form or another: and this is where Transport & Logistics firms will have an incredibly important role to play.
Transport & Logistics will be at the forefront of helping their customers to find solutions to issues such as new regulations, tariff and non-tariff barriers, and even logistical barriers such as delays at border crossings. Firms in the sector have to be ready to offer their insight, experience and solutions to their customers after Brexit, a time when it is likely to be sorely needed.
By seizing these opportunities to help UK businesses trade internationally and overcome the challenges ahead, Transport & Logistics companies can become trusted partners, delivering growth for themselves and their customers for many years to come.
Read about how we keep things moving for our Transport & Logistics customers.