Transport and Logistics: An industry facing many challenges

Transport and logistics is one of the largest sectors in the UK, with Skills for Logistics estimating the sector employs 2.3 million people (one in 12 of the workforce) and is worth more than £74 billion to the economy. But those operating in such a large industry inevitably must address a variety of controversial issues, including fuel prices, road safety and climate change.

Fuel prices in a tough economy

Many in the transport and logistics sector view rising fuel prices [Fuel Prices] as their biggest challenge and, as a difficult economic climate results in tough trading conditions and profit margins being squeezed more than ever, the impact increases in duty are having is significant.

World oil prices have risen dramatically in recent years and while most operators recognise the need for government to use duty as a means of balancing the public books, fuel represents a third of heavy goods vehicle operating costs - making any above-inflation rises highly contentious.

Contending with climate change concerns

Alongside costs, however, the industry must contend with emissions targets driven by climate change [Climate change] concerns and a range of regulations intended to improve road safety, but which some view as unnecessarily burdensome.

Road transport accounts for around 20 per cent of the UK's carbon dioxide emissions, but with the country aiming to reduce overall output to 80 per cent below 1990 levels by 2050, pressure is on to cut this. An interim target of a 34 per cent reduction by 2020 is also in place, meaning the industry must act to meet its obligations.

One way in which it is doing this is introducing new vehicles and engines that offer lower consumption and greater efficiency. Exhaust gas recirculation and other advanced techniques reduce nitrogen oxide emissions, helping bring newer models in line with stringent European standards, with the Euro 6 level coming into force in 2014.

But in addition to emissions deadlines, operators are faced with a need to ensure all lorry drivers have undertaken 35 hours of Driver Certificate of Professional Compliance training by 2014. The requirement is intended to reduce occupational road risk and with the costs of insurance claims rising it is more important than ever to minimise the possibility of accidents.

However, Freight Transport Association research has found some companies struggle to justify the cost of the training because they fear drivers will have moved on by the time the deadline comes around. Balancing this against the potential financial damage that can be sustained in the event of a problem is key and if the scheme is to be effective, a way around this obstacle will need to be found.

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