News / Government needs to know how freight and logistics works to support it, says ITC

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The UK freight and logistics industry needs a lot more support from government if it is deal with the challenges posed by the growth of e-commerce, the changing face of international container shipping and imbalance of imports and exports.

Research released today by the Independent Transport Commission (ITC) concludes that, the Department for Transport (DfT) notwithstanding, there are whole areas of government that have little understanding of the impact of the freight logistics industry on the sectors their departments regulate.

Matthew Niblett, secretary general of the ITC, told The Loadstar that the project shows just how important the sector is to the general health of the UK economy.

“A small investment in reducing costs would lead to significant savings across the wider economy. We found that a 25% reduction in transport costs as a percentage of GDP from 20% to 15% is equivalent to a permanent increase in domestic consumption of just above 1.5% of the UK’s GDP,” he said.

The report concentrates on three particular segments: the challenges posed by online retail; the increasing use of portcentric logistics; and the growing problem of repositioning empty containers in the UK.

It predicts that 25% of retail spending will soon be online, leading to an extra 1.7 million van journeys a year, which would represent a particular challenge to civil servants, such as town planners, who normally have little to do with the freight sector.

“Actually, we feel that it is an issue for the policy makers and not just the delivery companies,” Dr Niblett added.

“For example, many policymakers simply aren’t aware that we import twice as much as we export, and a large part of our purpose is to try and wake policymakers more widely to these issues.

“This fact might be well known by staff at the DfT, but it doesn’t seem to be understood by their counterparts in other departments,” Dr Niblett continued.

However, he added that the project has also put the spotlight on a number of areas which need developing.

“Better data is needed – and we therefore recommend that, with the DfT, a seminar is held to discuss the statistical challenges and to see how we could develop collaboration on this between government and industry.

“We found – especially looking at portcentric logistics – that much of the data is rather circular and independent data quite limited, and tackling this is something the government could do to get the ball rolling.

“For the next phase of our research, we would like to look at a number of case studies and use these to illustrate some possible solutions,” he said.

One possible study identified by report author Nick Gazzard would be “exploring the movement of empty containers in and out of Scotland, to see if it is possible to reduce the current shortage of container supplies to the Scottish whisky industry”, it said, emphasising that this could lead to new areas of collaboration between shippers and shipping lines.

The report will be formally launched at an event in London tomorrow evening.