The home delivery specialist Parcelhero described the sector’s fortunes as a “rollercoaster ride”
The UK’s transport and storage sector endured one of the weakest months for turnover in July, according to new official data – but firms remain upbeat about prospects for September.
Figures from the Office for National Statistics (ONS) show that only 9% of companies in the sector – which covers logistics, parcels, haulage and warehousing – reported an increase in turnover during July. That was lower than almost all other industries, with only the arts sector performing worse at 5.2%.
By contrast, 19.4% of manufacturers and 20.1% of retailers reported turnover growth over the same period. Across the economy as a whole, the average was 16%.
The home delivery specialist Parcelhero described the sector’s fortunes as a “rollercoaster ride”.
Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T., said: “Overall, an average of 16% of businesses across all industry sectors revealed that their turnover had risen in July over the previous month. The number of transport & storage companies reporting turnover growth clearly lagged far behind the majority of sectors and, in particular, their manufacturing and retail partners.
However, this may only be a temporary dip. Countering July’s results, transport & storage companies are bullish about their revenue prospects for September. An impressive 20.4% of transport & storage firms expect to see an increase in their turnover next month, beating all other sectors except education and health/social work.”
According to the ONS survey, just 13.1% of manufacturers and 18% of retailers expect their turnover to increase in September – suggesting transport and storage businesses are currently more optimistic about the months ahead than their closest partners.
The data also shows that while growth was muted in July, the scale of decline was not as steep as in some other sectors. 27.3% of transport and storage companies reported a decrease in turnover, compared with 31% of manufacturers and 32.9% of retailers. The all-sector average was 24%.
Looking ahead to September, only 10% of transport and storage companies anticipate a fall in turnover, compared with 15.2% of retailers and 18.6% of manufacturers.
Despite the cautious optimism, competition remains a pressing challenge. Jinks noted that larger operators in the sector feel under particular pressure:
“Finally, to complete the rollercoaster ride, there’s now another major concern for larger transport & storage companies. It’s currently a very aggressive market and, compared to any other sector, more transport & storage firms that employ 10 or more people say that competition is currently impacting their business. 33.2% of transport & storage companies said competition is impacting their turnover as opposed to, for example, 30.3% of retailers and just 23.5% of manufacturers employing 10 people or more.”
Jinks argued that the long-term success of transport and storage businesses will depend on how well they align with retailers that embrace both in-store and online channels.
“One certainty is that it will be those transport & storage companies that are partnered with retailers with strong in-store and online sales that will ultimately triumph. Parcelhero’s influential report ‘2030: Death of the High Street’ has been discussed in Parliament. It reveals that retailers must develop an omnichannel approach, embracing both online and physical store sales.”