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Logistics sector: launching warships and dunking digestives

06 March 2014 #Features & Interviews #Trailer #Truck #Van

Whether you want to dunk a digestive in your tea or a 65,000 tonne warship into the sea, you will have needed vans and trucks to help the biscuit and the boat on their journey to their final destinations.

Transport News Brief takes a look at some of the numbers that showcase what makes the UK logistics industry truly world-class.


When a champagne bottle smashes against the hull of what will be Britain’s biggest-ever aircraft carrier at Rosyth dockyard in Scotland on 4 July, one wonders how many of the onlookers will spare a thought for the contribution the UK’s logistics industry is making to the 65,000-tonne leviathan. And the arrival of the bubbly on the end of the rope.

To be named HMS Queen Elizabeth the most complex warship ever to be constructed in the UK has already sustained over 7,000 jobs at more than 100 companies across Britain, but their activities would have been impossible without logistical support.

At the heart of that support is supply chain specialist Wincanton, which has been instrumental in the delivery of over 12.5 million items required by the carrier.

The complex inventory ranges from a single washer to a 120-tonne £13 million gas turbine assembly, the biggest of its type in the world. Wincanton has used its expertise to cut the anticipated transport spend by 60%, while its IT platform has ensured 99.7% stock accuracy. This level of accuracy is crucial as any item that is not available when it should be could result in a delay, impacting the cost of construction.

Wincanton’s activities are just one example of the breadth and depth of the UK logistics industry’s expertise and its importance to the country.

According to a report just published by the Chartered Institute of Logistics and Transport (CILT) – UK Freight Planning to 2035 – the industry is a central part of the economy.

“Estimates vary significantly, but depending on research definitions the sector employs 1.7m to 2.2m people across 63,000 to over 192,000 companies, which is up to 8% of the UK workforce,” it observes. “These companies have a collective turnover of £770bn and a gross value add of circa £55bn-£96bn. This equates to 11%  and 26% of the total economy respectively.”

There is no doubt that it is an efficient industry and the CILT report cites surveys that show distribution costs of British businesses have fallen sharply since 2000, from around 12% of sales to just 6%.

“The UK is in the top 10% of countries for its freight and logistics capabilities and is widely recognised for its supply chain leadership through world-leading institutes such as the Cranfield Centre for Supply Chain and Logistics Management,” it states.

According to the most recent statistics published by the Department for Transport, commercial vehicles grossing at above 3.5 tonnes handled a massive 139 billion tonne-kilometres of goods in 2010, up from 125 billion the previous year (although still some way behind the 146 billion recorded in 2008 before the recession bit).

Rail handles around 20bn tonne-kilometres of cargo a year, so although its role is significant and growing, road transport still dominates.

All that road tonnage is shifted by a surprisingly small number of wagons. Britain’s logistics companies are adept at sweating their assets with 44-tonners regularly double- and sometimes triple-shifted. It is the reliability and durability of modern trucks that makes this possible.

Just under 560,000 HCVs are registered for use on UK roads according to the Society of Motor Manufacturers and Traders’ (SMMT) 2012 Motorparc data.

That compares with almost 600,000 HCVs that were on UK roads pre-recession, so each of the trucks is working harder, and more efficiently, than ever.

By contrast, SMMT figures show that the UK van parc has slowly risen to 3.63 million. It is an increase that undoubtedly reflects the steady rise in online shopping and the need for goods bought over the internet to be delivered to households – biscuits for cups of tea, for instance – with some parcel carriers reporting a 20% hike in volumes last Christmas. On 2 December 2013 Amazon UK was taking orders at a rate of 47 items a second totalling 4.1 million sales on that day alone.

“Everything from groceries to clothes, from sofas to mobile phones, whatever it is, the chances are that if it is has been ordered online then it has probably been delivered in a van,” says FTA Head of Vans, Mark Cartwright.

One major and perhaps less-remarked change to UK logistics over the past few years has been the inexorable rise of the pallet networks, however. A cost-effective way of shifting pallet-loads of goods, and one that has helped many of the medium-size hauliers that handle much of the traffic stay afloat during tough times, it is proving as popular on the other side of the Channel as it is in Britain.

Pall-Ex alone saw volumes increase 22% across its European network in 2013. “There is confidence in the pallet network model that stretches from our members through to their customers and we firmly believe that this will facilitate even further growth in 2014,” says Managing Director, Adrian Russell.

The Founder, Chairman, and Chief Executive of Pall-Ex is of course no-nonsense Dragon’s Den star Hilary Devey.

Acutely aware of their impact on the environment, and aided by truck manufacturers responding to ever-tougher legislation, logistics companies have worked hard to reduce their environmental impact.

Besides carrying more goods in fewer vehicles, particulate emissions have fallen by almost 100% over the past 20 years, while CO2 emissions have remained stable despite a 20% increase in cargo volumes.

Both third-party logistics and major own-account fleets are determined to clean up their acts even further. Arla Foods for example plans to ensure that 20% of its truck fleet is capable of running on Bio-LNG, a mixture of 75% liquefied natural gas and 25% liquefied biomethane; a change that should help cut the CO2 output of its distribution operation by 25% by 2020.

Working tirelessly to improve efficiency and bring down cost, the logistics sector underpins the UK economy, whether you’re talking shipbuilding or biscuit baking.

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