Spe­cial re­port: Scot­land’s lo­gis­tics sec­tor sets the pace

The Herald Business - - Front Page -

WE all take the lor­ries and vans t hat seem t o stream end­lessly along Scot­land’s road net­work for granted, but as the team at the Lo­gis­tics and Re­search Cen­tre at He­riot Watt Univer­sity points out in a re­cent press re­lease, if road freight trans­port were to stop mov­ing, for some unimag­in­able rea­son, the en­tire UK econ­omy would be paral­ysed within four to five days. The UK sec­tor as a whole has an an­nual turnover of about £24 bil­lion, with some 290,000 driv­ers em­ployed to op­er­ate over 400,000 lor­ries, and with tens of thou­sands of staff in sup­port­ing roles.

As if sim­ply keep­ing goods flow­ing be­tween busi­nesses and keep­ing the su­per­mar­ket shelves stacked were not mis­sion enough, the sec­tor is un­der huge pres­sure to “green-up” and cut its car­bon diox­ide emis­sions as part of the UK’s com­mit­ment to sus­tain­abil­ity un­der the Ky­oto Agree­ment. Ac­cord­ing to UK govern­ment statis­tics, the trans­port sec­tor as a whole was re­spon­si­ble for some 24% of the UK’s green­house gas emis­sions in 2012. Fur­ther pres­sure comes from the fact that the EU white pa­per on trans­port sets a 60% emis­sions re­duc­tion tar­get for trans­port.

All of this makes sus­tain­abil­ity a ma­jor is­sue for com­pa­nies in the sec­tor and sus­tain­abil­ity is taken very se­ri­ously by all com­pa­nies – not least be­cause cut­ting emis­sions is of­ten syn­ony­mous with more ef­fi­cient route plan­ning and lower fuel con­sump­tion, both of which mean lower costs for com­pa­nies. And in a sec­tor where mar­gins can be wafer thin, low­er­ing costs is an es­sen­tial part of gen­er­at­ing profit.

A re­cent study of Scot­land’s road freight trans­port com­mis­sioned by the Scot­tish Ex­ec­u­tive starts from the premise that road speed and jour­ney time re­li­a­bil­ity are cru­cial to haulage op­er­a­tors. Road freight traf­fic only ac­counts for around 13% of the to­tal num­ber of ve­hi­cles on Scot­land’s roads with pri­vate ve­hi­cles be­ing far and away the most nu­mer­ous. Con­ges­tion on the roads is no friend to haulage op­er­a­tors, par­tic­u­larly where per­ish­able goods are con­cerned. Dis­tance is an­other chal­lenge. The Scot­tish Ex­ec­u­tive study found that haulage op­er­a­tors in Scot­land are hav­ing to strug­gle with the fact that there are more de­liv­er­ies into Scot­land than from Scot­land to the south.

On the pos­i­tive side, the re­port found the road freight mar­ket is mov­ing in the di­rec­tion of con­tain­ing a higher pro­por­tion of high value, fast mov­ing con­sumer goods, call­ing for a flex­i­ble and re­spon­sive ser­vice from lo­gis­tics com­pa­nies.

Scot­land, with its far flung ru­ral com­mu­ni­ties, presents par­tic­u­lar chal­lenges as the sec­tor re­sponds to in­ter­net shop­ping, and smart rout­ing and empty leg util­i­sa­tion will be key here. Fuel costs and mar­ket re­sis­tance to ris­ing prices are a peren­nial headache for op­er­a­tors but the op­por­tu­ni­ties for de­liv­er­ing value added ser­vices, par­tic­u­larly around is­sues such as re­turned goods, of­fer ways for­ward.

Trans­port and lo­gis­tics en­com­pass the in­ter­play be­tween road haulage, rail and fer­ries and get­ting the bal­ance right be­tween them, along with the smart use of Scot­land’s ports, re­quires skill and plan­ning.

The sec­tor is vi­tal to Scot­land’s growth and fu­ture pros­per­ity and does a tremen­dous job of de­liv­er­ing the right goods at the right time. This re­port spot­lights some of the ma­jor play­ers as they grap­ple with the chal­lenges in­volved in keep­ing com­merce mov­ing.

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