Confidence across the region’s transport sector has improved dramatically and most logistics firms are planning to invest although the sector still faces major challenges and pressure on margins, according to a survey. The latest UK logistics confidence index*from Barclays and Grant Thornton -which includes decision makers from the East Anglian logistics industry - showed a 25 per cent rise in confidence during the second half of 2013 compared to the previous six months and a 43 per cent improvement on the previous year. However margin pressure, customer demand, fuel costs and market volatility cited are the biggest concerns over the next six months. Three quarters of logistics businesses are also planning to invest profits in significant capital expenditure such as fleets, infrastructure and technology and a quarter are also looking at acquisition opportunities. Over half planned to increase staff.
Darren Bear, corporate finance partner at Grant Thornton East Anglia, said: "Operators have entered 2014 on a strong footing, confident that the wider economic revival will continue to drive demand for logistics services. This momentum is undoubtedly encouraging but the relatively high level of competition in the sector is putting continued pressure on margins. Operators would be wise to keep an eye on value-add opportunities which ingrain them deeper into supply chains and strengthen their roles as critical partners in clients' success."
Peter Glynn, relationship director, Corporate Banking at Barclays, Eastern region, said: “For nearly a third of the industry, customers expanding their contracts are the main source of new business, up from a fifth in the previous six months. However, while confidence has improved, this is only the start of an upturn in the sector where challenges remain and margins continue to bite.”
