September 10th, 2020

UK Logistics Industry Trends in 2020

Rapid change in uncertain times sees UK industry rise to the challenge

Our inaugural blogpost here on the Roll Pallet UK blog seems an appropriate opportunity to analyse the current market across our clients’ sectors, researching emerging trends, threats to overcome and new opportunities to embrace which have presented themselves in light of this ‘new normal’ we’re all facing together. Amidst the looming spectre of Brexit and all that’s happened over the past 9 months, it seems a decent place to start as we embark on an entirely new post-Covid, post-Brexit landscape with the rest of British industry.

Across the globe, countries have faced immense problems due to Covid-19 pandemic outbreaks; this has led to negative impacts on society as a whole, and more importantly on the production, supply chain, and logistics management, and also on business models of the organisations (Lin, 2020). There are many disruptions reported across the worldwide supply chain such as production plants temporary closure, shortage of medical equipment, and essential items like food (Ivanov, 2020).

How the pandemic has shaped the UK logistics industry

Following the coronavirus spread, and lockdown situation countries are highly dependent on the transport and logistics industry to keep-up the delivery of various commodities, especially food and medical items that faced a sharp rise in demand (Johnson, 2020). In the UK with a lockdown situation land transport plays an important role in keeping up the country going, which results as logistics companies to handle the increasing demand, and dealing with different challenges, along-side keeping up with the safety measures of its workforce (TouchStar, 2020).

The initial period of the lockdown in the UK resulted in empty shelves of the marts; this led to an increased burden on the logistics companies to fulfill the supply demands of various products, and to maintain the flow supply chain. Freight Transportation Association of the UK introduced various support policies for the logistics companies by allowing them to work during the lockdown, keeping open roads for them, giving those facilities to test the workforce health, etc.

There are different trends seen in the logistics companies in the UK such as increasing usage of internet and technology (K&L-Gates, 2020). Online shopping across Britain increased due to temporary closures of shops, approximately 61.9% of non-essential items sales were made online in May 2020 (TouchStar, 2020). Delivery hours are ordered to remain extended even after lockdown eases to help society and the economy of the UK to recover. Moreover, there is an experienced increase use of technology and robotic methods of operations to overcome the workforce restrictions to work.

Also, following pandemic businesses are changing their logistics models from “just in time” to “just in case” (K&L-Gates, 2020), keeping larger stock of inventories to meet an unexpected increase in demand or supply issues. The further pandemic situation has led to the increasing use of the rail transport system in the UK to maintain the supply of goods across the country (Walton, 2020).

Moreover, to reduce carbon emissions makes the environment cleaner UK government pressurised logistics companies to use sustainable ways of operating, such as hybrid cars, using sustainable materials in their packaging. Though different strategies are planned to deal with it has affected the logistics industry in a different way depending on the type of company and its products that are delivered.

How changes in the UK logistics industry affect our client industries

Naturally, all sectors have had to adapt pretty dramatically to changes brought about by the Covid era. Here are some of the main ones in more detail.

Food distribution

Businesses have been severely affected by the COVID-19, most importantly the food distribution.  Hurdles in the transport and logistics of items have negatively affected the movement of goods within the supply chain. Different food items are transported using distinct means of transport such as trucks, railways, or air freight. The UK relies mostly on the Dover Strait maritime route, and with pandemic precautions, fewer drivers, workers on ports directly reduce the companies capability to provide more goods to the companies, marts, and the final consumer.

This bottleneck at one place in the food distribution network will lead to disruption in the production of others, leading to reduced supply. However, with increasing government support online shopping demand and other issues can be reduced, maintain the flow of food availability across the country (Heron, 2020). Hence due to increasing demand, roll cage products could be used to easily stock and pile the food while delivery or in stores, warehouses.

Hospitality and events

The hospitality industry is an important part of the UK economy as being the 3rd biggest employment sector. Due to the pandemic hospitality sector has been reduced by 23.1% (Ali, 2020). As spending on non-essential items are subsequently reduced due to which demand for hospitality/event management is reduced. With the trend towards using e-commerce and UK government ease to logistics companies, the hospitality sector could maintain their position by changing their strategies to online booking, and customer assistance facility.

Also offering customers to arrange events in their home with taking all safety measures, with transport facilities given by government hospitality/event management companies may be able to get all stuff for events to be arranged at customer’s places. Though demand decreased for the hospitality sector with these strategies, the demand for roll pallets, jumbo containers, security pallets demand may increase as to make secure movements of the things to make the event decoration at customers place or to store the things safely in the company’s warehouses, Roll Pallet UK may work even more closely these companies for the foreseeable, given the clear synergies.

Pharmaceutical

With the increasing demand for essential items including medicines, there are increasing bottlenecks in the logistics operations, causing delays in the delivery of goods, due to restriction of people, and goods movements across the country. Pharmaceutical items production could be moved to areas where there is less disruption in the UK or even to countries where Covid-19 has been reduced, or else it could be outsourced.

Moreover, with the increased use of technology such as telehealth, app-based ecosystem, and automated production process could lead to contactless production, and sales, requiring fewer workers. And with government assistance to maintain the health of workers’ supply of medicines could be maintained, with companies adapting to the “just in case” strategy to maintain a large number of pharmaceutical items to meet the increasing demand. Further, as Roll Pallet UK offers customised roll pallets to the pharmaceutical industry so with a sharp rise in their demand due to coronavirus, and with pilling strategy roll pallet demand may increase, and government relaxation in transport facility they may be able to supply more of their pallets.

3PL

The third-party logistics (3PL) is a business that offers logistics services to the organisations for some functions or handles the entire of their supply chain (SemanticScholar, 2011). Roll Pallet UK works with leading 3 and 4Pl companies’ proper supply of pallets, containers at the required time especially during a pandemic when their demand may increase due to stockpiling, and increasing demand for goods.

As logistics and transport facilities are negatively affected due to the pandemic situation, which directly affects our operations as they outsource their logistics operations to the 3 and 4PL companies. Though we may face fewer sales at the start of pandemic situations, and lockdowns, however with the UK government supporting policies for logistics companies companies like our may well revive its situation.

Conclusion

The coronavirus spread indicated that how supply chain and logistics management could be severely affected. The above different sectors of our infrastructural and community networks are discussed that are affected due to pandemic situations. Outsourcing logistics can be a beneficial option but like in pandemic it can negatively affect the whole supply chain process.

Though different business sectors are affected due to virus spread but with government assistance and different new options explored by companies such as automation, the use of digital tools has helped them to overcome the delays in production and supply and we’re facing a bright new horizon in digital-first eCommerce with our clients as part of the ‘new normal’ moving forward.

References

Ali. (2020, July 28). How the coronavirus outbreak has impacted he UK hospitality sector. Retrieved from pcr: https://www.pcrllp.co.uk/blog/230-coronavirus-and-the-hospitality-sector

Heron. (2020, June 4). Vulnerability of the United Kingdom’s food supply chains exposed by COVID-19. Nature Food, 1, 315-318.

Ivanov. (2020, April). Impacts of epidemic outbreaks on supply chains. Springer Link, 136.

Johnson. (2020, April 28). Transport and logistics during the COVID-19 pandemic. Retrieved from Manchester blogs: http://blog.policy.manchester.ac.uk/posts/2020/04/transport-and-logistics-during-the-covid-19-pandemic/

K&L-Gates. (2020, July 16). Retrieved from Lexology: https://www.lexology.com/library/detail.aspx?g=1528c7fa-f736-4982-a1eb-693204cd0754

Lin. (2020). Impacts of epidemic outbreaks on supply chains. Springer Link, 93, 211-216.

SemanticScholar. (2011). Logistics and Customer Service in the. Semantic Scholar, 1(3).

TouchStar. (2020, July 8). COVID-19’s impact on the logistics industry. Retrieved from Touch Star: https://www.touchstar.co.uk/blog/covidlogistics

Walton. (2020). Logistics UK. Retrieved from Rail Freight: https://www.railfreight.com/business/2020/08/19/logistics-uk-rail-freight-drives-pandemic-recovery/