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quicker to invest in new technologies and adopting

smarter ways of working will be the 3PL companies leading the field in 2020...”

improve efficiency in areas linked to

seasonal trends and the demands of flexible operations. Shared data will allow the traceability of an item in the supply chain.

8. BETTER MANAGEMENT While commercial success will largely depend on staff, an all-encompassing WMS will encourage better employee management. Staff will be more accurately measured against KPIs from time per task, picking routes and over/ under performers to staffing levels required for specific orders and picks.

9. GLOBALISATION In 2020 the world economy will be more integrated and 3PLs will be expected to work on a larger scale with a distinctly global outlook. Distribution will expand globally with more opportunities opening up in other parts of the world including the Far East and South America.

10. SUSTAINABILITY As businesses identify new ways of working to increase efficiencies, sustainability will impact on the buildings and equipment used by 3PL companies which will look to green-friendly technology to deliver efficiency savings in areas including energy consumption and transport costs. Expect companies, even direct competitors to share transport in order to reduce overheads including fuel and maintenance costs. The 3PL industry will face many

challenges in the future but by 2020 the sector will have grown dramatically, largely due to the massive expansion of emerging global markets. Technology will continue to be vital to the sector, mobile devices and business intelligence solutions playing a big part in streamlining the industry. Those firms that are quicker to invest

in new technologies and adopting smarter ways of working will be the 3PL companies leading the field in 2020.

Advanced Business Solutions T: 0845 1606162

Enter 350 S10 MARCH 2014 | MATERIALS HANDLING & LOGISTICS / MATERIALSHANDLINGLOGISTICS Roger Williams UK’s 3PL sector prepares for growth

More than half (51%) of UK third party logistics (3PL) companies expect to invest more in equipment, people and premises in 2014 than they did in 2013. This was one of the findings of 3PL 2013 - a survey of warehouse operators undertaken by the United Kingdom Warehousing Association (UKWA). The anticipated upturn in investment

among 3PLs will clearly be welcomed by suppliers to the industry and reflects a renewed sense of optimism across the logistics sector. The majority of respondents (53%) expect to see their investment in information technology increase next year while 49% are preparing to spend more on their vehicle fleets. Extra staff (47%), bigger premises (47%) and materials handling equipment (39%) are areas where respondents predicted that they will spend more. Only 10% foresaw a decline in their year-on-year spending. The sector’s investment plans are

matched by a confident attitude toward the likely direction of company turnover in 2014 with 55% anticipating an increase; 33% thought their turnover was likely to remain unchanged while 12% expect a fall. The survey showed that in 2013 most

workers (61%) employed in the 3PL sector received a modest pay rise. The majority (67%) were awarded an increase of 3% or less while 33% enjoyed an above-inflation salary boost of between 3 and 5%. Encouragingly, nearly half of the companies surveyed (47%) expect to be able to give a general pay rise to all staff in 2014. There are indications of strong levels

of satisfaction among users of 3PL services with the performance of their suppliers. Across the sector an average 83.78% of all contracts up for renewal were extended with 14% of respondents reporting that they had enjoyed a 100% contract renewal rate

over the past year. The 3PLs surveyed work with their clients for an average of 8.77 years although 59% report that their relationships with established customers go back 10 years or more. When it comes to new business wins

the average length of the most recent new contracts gained by respondents to the survey was 2.41 years.

INCREASING FUEL COSTS While the majority of respondents appear in buoyant mood going in to 2014 the sector faces challenges on several fronts. When asked to rate the greatest threats to their business, respondents voted increased price competition, cost inflation (particularly fuel) and regulations and legal issues among the issues giving most cause for concern. In the past year 82% had increased the cost of their services by up to 5% to cover rising fuel charges. Just 5% had been compelled to raise

their prices by more than 10% to offset the rising price. Respondents had further ways of countering fuel costs; 35% had introduced fuel monitoring technology and placed more emphasis on driver training; 12% had sought to mitigate the impact by negotiating fixed rate deals from their suppliers; while 12% had switched. Despite concerns there appears to be little appetite within the sector to embrace rail as an alternative to moving goods by road. When asked if they are likely to use rail transport to distribute products over the next 12 months 82% said ‘rarely’, 11% answered ‘sometimes’ and just 7% said ‘regularly’.

TRAINING LOW ON AGENDA One depressing aspect of the survey was the attitude toward training. While 45% reported that staff receive it on an ad hoc basis, only 18% have any kind of formal staff or management training program in place and 37% reported that their company offers ‘very little’ or no formal training to key workers. Even more disappointing was the approach to apprenticeship schemes; 69% of respondents have no formal scheme. Of the 24% that do, the majority are in warehousing and storage (50%) and logistics operations management (25%). “UKWA’s 3PL 2103 survey provides a

useful snapshot of our industry as it emerges from one of the longest and most difficult economic downturns many people can remember,” comments UKWA CEO Roger Williams. “It shows an industry that is well

placed to face the challenges of the future and quite rightly looking forward with no small degree of optimism.”

UKWA Enter 351

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