Long road from recession

CEO Steve Agg distills recent survey findings of CILT members to offer advice to Transport Secretary Philip Hammond on guiding the industry out of the slump

Signs of recovery from the trauma of the last two years are beginning to appear. A marginal, but consistent, increase in economic growth figures from Government has been accompanied by some actual evidence.

Chartered Institute of Logistics and Transport (CILT) members report an increase in business activity, job vacancies are on the increase, and commercial vehicle sales are improving. But, clearly, there is a long way to go yet and the recovery remains fragile.

With this in mind it is therefore no surprise to find that the priority for Institute members in the output from their recent survey strongly supported investment in measures that will aid economic growth.

The survey asked members to put themselves in the position of Secretary of State for Transport under instruction to find at least 25% savings from the budget and to identify which areas should be cut and which protected. CILT has recognised that hard decisions will need to be made during the lifetime of this Government with investment choices being made very much on the basis of delivering value for money.

Improving economic activity will inevitably lead to an increase in the movement of goods and people and this means more traffic and with it the prospect of more congestion, more delays and more costs. As such CILT members are saying that Government should concentrate available funding on investing in maintaining and improving the present road and rail infrastructure in order to get the maximum efficiency out of what we have at the moment, as opposed to prioritising new infrastructure developments for the future.

Competition within the transport sector continues to keep haulage rates lower than is desirable and the prospect of higher fuel costs and increased duty levels places further stress on operating costs.With fuel representing perhaps between 30 and 40 per cent of the operating costs for some of the larger vehicles there remains an overwhelming need to ensure that every journey is as fuel efficient as is possible. This means an emphasis on smart buying, maximum vehicle utilisation, minimum empty running, and the very best in driver behaviour. It has been established that the difference between bad and good driving techniques can represent up to 10 per cent in costs - it cannot be ignored.

Of course lorry driving is an issue in itself. At the CILT logistics conference this summer a panel of representatives from the UK's largest third party logistics providers were as one in their concern at the prospect of a shortage of lorry drivers in the not too distant future. The average age of an HGV driver is now 46 and rising. The problem of attracting younger people to work in our industry isn't limited to drivers however as the problem extends to most areas of the supply chain operation from the warehouse to the boardroom. It is ironic that such an essential and exciting industry, that employs over 2.3 million people, should have a problem in attracting sufficient numbers of recruits.

Green issues continue to remain high on the supply chain agenda and it is a national challenge to all of industry to reduce carbon output. CILT's CarbonActive scheme is one of a number of products on the market which demonstrate how carbon emission management improvements can be implemented in order to reduce the supply chain carbon footprint and simultaneously cut costs. It is significant to report that overall 'green' policies, whether relating to vehicles, routing, scheduling or operations have the joint benefit of reducing environmental impact and, crucially, cutting costs as well as improving performance and enhancing customer service.

The coming months which will of course see the outcome of the actual Secretary of State for Transport's spending review. It will be difficult for business and individuals alike but we must continue to do all that we can to nurture the fragile recovery.