Freight Service Disruption Levels
Data above is from around the 6 month point of the coronavirus pandemic, courtesy of Logistics UK (formerly the Freight Trade Association).
Logistics UK are being as helpful as possible during what is a health and economic crisis. They work with other bodies to produce a good practice guide, along with lobbying goverment and sharing current policy.
International and domestic freight transport, by air, rail, road or sea is classified by the government as an essential activity and not heavily restricted.
Social distancing measures are naturally in place throughout the chain and other Covid secure procedures. Closed border points, or quarantine requirements for crew can apply, part of the reason services are disjointed.
An Interrupted Flow
Supply chain disruption has been an issue for many companies. The health measures and border delays mentioned above, reduced belly capacity for air cargo, production hold ups, or lack of demand in certain sectors.
Time to plan and the easing of lockdown measures saw improvement over the summer, with more than half of lost ground in UK GDP recovered by August. For freight companies, this was however quite variable.
Unlike industries with a specific function, freight services apply across the board. Some companies are busy, those who support a niche sector which is badly hit are suffering and average performance is down.
The Logictics UK data we started with suggests a year on year lag around 20%, global air cargo capacity is currently 22% lower. Other data, on companies trading normally, or ship visits show a similar level.
There is still a difference between trading and profit levels. The most recent freight sector data suggests average profits are down 40%, a fair share of operators show no profit, or a continuing loss.
The fact that few freight businesses have gone and supply chains continue is testament to how well managed the UK freight industry is. As infection rates grow again and winter approaches, we hope central government recognise this.
Freight companies need to be agile but so does the regulatory environment. Relaxation on driver hours may help, along with delivery hours imposed by local authorities, vehicle testing and licence renewal require flexibility.
Financial support will continue to be needed for many companies and their workers. The effects of the pandemic will multiply, customers may cease trading, recovery be hampered by a second wave, which reduces business and consumer demand.
Coping with business threats, finding opportunities and managing cost is up to us, the freight industry. We will do so and come out of the other side stronger, as long as those in power recognise the value of a critical service.