Logistics companies in the UK are more optimistic over their futures than at this time last year, despite continued uncertainty over the outcome of Brexit negotiations, a new report from Barclays Corporate Banking and Moore Stephens has found.
Almost half the respondents to the the UK Logistics Confidence Index 2017 said the sector was in a better state than five years ago.
However, the survey also shows that almost half (45%) of the companies that responded felt that business conditions had become more difficult in the last year, and specific concerns around Brexit show a less cheerful picture.
Less than one tenth of logistics operators said they felt more positive about Brexit than they did last year, with 61% saying they expected it to have a negative impact on their businesses.
However, many logistics operators have yet to take any action, with just 2% saying they have engaged professional advisers and 23% taking no action at all.
Moreover, the report suggests that the reason why operators are not taking action is because they are waiting for further clarity on the deal.
This explains why there is little evidence of operators changing their warehouse footprint, for example, considering the Republic of Ireland as a possible route to the European Union, the report said.
“The confidence reported in this year’s index is really encouraging and demonstrates the resilience of the sector,” said Barclays Corporate Banking head of transport and logistics Rob Riddleston.
“Despite a tough environment, firms are getting on with it. However, as the path ahead becomes clearer, this business as usual approach will need to flex.”
He added that the battle to retain customers was set to become more aggressive, as operators worked to differentiate themselves through investment in new technologies.
“The appetite to acquire, even in the next 12 months, is telling,” Mr Riddleston said.
“Both could become significant threats for those businesses who do not face the changing operational landscape head-on, and so miss out on taking advantage of its opportunities.”
A competitive environment had not dampened the sector’s expansion, with four in ten logistics operators saying they were likely to make an acquisition over the next 12 months, a 15% increase in the number of businesses that said they had takeover plans last year.
Moore Stephens partner Philip Bird sad: “There is no doubt that consolidation in the sector has accelerated over the last 12 months and our survey results clearly suggest that this trend will continue.
“While a large part of historic consolidation has been defensive, aimed at protecting or gaining market share in a very competitive environment, we expect that future consolidation will be driven by the need to access new technologies, faster growing verticals such as e-fulfilment, and by the need to access new geographies as a result of Brexit.”
He added that mergers and acquisitions expectations also reflected a level of confidence among operators, and this was encouraging to see in light of an environment of continued economic and political uncertainty.