Logistics & Posts

Overview

The UK Logistics & Posts Sector is worth approximately £55bn to the economy and comprises 5% of the UK GDP. Currently 1.7m people are employed in this sector by over 63,000 companies.  Issues which are currently affecting this sector include:

Fuel Prices & Climate Change

Increasing fuel prices have a direct impact on post and logistics companies and there is an increasing global focus on climate change with new environmental regulations affecting these businesses. This requires companies to revisit strategic plans and to understand the issues that are likely to create or destroy value.

Increased Competition

There is increased competition in the market, not only from new small businesses, but also from the consolidation of larger companies. This has resulted in significant pressure on prices and therefore lower margins. Companies are therefore trying to differentiate themselves by offering a diversified portfolio of services and by building a reputable brand.

Emerging Markets and Consolidation

Declining trade barriers and the rise of low cost manufacturing in countries like China has resulted in more opportunities from these emerging markets. It is imperative that global logistics companies establish a foothold in these emerging markets to take advantage of the high demand. This has been the main reason behind the significant amount of consolidation in the market noted in recent years. There has been strong competition by companies to increase their market share, and the demand from customers for a greater diversification of services.

Outsourcing and Technology

There has been a general trend of outsourcing supply chain management and warehousing services to logistics companies in order to be able to efficiently meet customer demands. This has gone hand in hand with the evolution of technological services (e.g. real-time tracking of parcels and cargo) which has given logistics companies the ability to provide customers with these integrated services. Logistics and postal companies need to ensure they are keeping ahead of the competition in relation to advances in technology to maintain a competitive edge.

For further information and to find out how PricewaterhouseCoopers can help you address these and other issues affecting the Logistics & Posts sector please contact Terry Hopcroft on +44 (0) 1895 522 241, or Neil Mellor on + 44 (0) 1895 522 093.