Contrary to general opinion, the UK logistics sector is driving capacity in the face of Brexit.
To properly test the UK’s logistics industry current sentiment, PRECISION Software spoke to a Global Industrial Logistics Director who wished to be unnamed about Brexit. We began by asking what the biggest logistics industry challenges facing the UK now that Brexit negotiations between the UK and the EU are taking place.
“Nobody is quite sure what is going to happen. As a manufacturing centre though, things have taken off. JCB, as an example, cannot take any more orders for this year. Within the supply chain everyone is short of labour. Take Jaguar Land Rover, they are going to hire another 50 buyers in the next week or so. That is just an example – companies like Bentley and Rolls Royce are flat out,” he said.
“As a manufacturing centre, things have taken off. Companies like Bentley and Rolls Royce are flat out.”
We asked if this was a symptom of Brexit or something else. “I don’t think anyone is getting ready for Brexit. Everyone believes it’s already done. Right now, they’re actually building capacity. JCB need to increase their capacity this year by 20 percent. That’s impossible when you can’t get the people; you can’t get the components. Take Amazon as an example. You might think they are a bit quiet in the retail world but they have 16 distribution centers in the UK plus hundreds of other smaller ones and are spending millions of pounds on equipment to enhance their [retail] offering. When I ask Asda if they’re worried that Amazon is getting bigger in retail logistics they say they’re not. All their stores are logistics centers.”
What are the likely developments within the UK logistics industry? “The bigger players are working off zero margins. People like DHL and EPO are working on the assumption that they can make a profit by enhancing their logistics operation and reducing costs and doing it through Gainsharing.”
Is it just the pressure of commercial challenges?
“There’s going to be more consolidation, that’s for sure. The smaller companies are being snapped up. But there is no doubt that a few people are going to get swallowed.”
“There’s going to be more consolidation, that’s for sure. The smaller companies are being snapped up.”
With everyone talking about sustainability at the moment, how does this affect his company?
“We’re different as we are a logistics, a manufacturing and consultancy company. Our biggest part of the business is Logistics and the second is manufacturing. Our consultancy business is the smallest part of the business.”