The industry’s expectations for trading in October appear weak, with just 6% predicting growth according to official ONS figures.
Just over a third of transport and storage firms (33.7%) reported their turnover decreased in August and few expect a rebound as the sector starts preparing for the peak period.
This contrasts with greater optimism in manufacturing, where 23.5% forecasted growth in October.
The ONS survey, covering 7 – 20 September, asked transport companies what challenges were impacting turnover, with competition the most commonly cited, at 18.8%. Economic uncertainty (17.3%) was second, followed by cost of materials (13.5%) and then insufficient domestic demand (11.7%).
According to David Jinks, head of consumer demand at ParcelHero, an increase in businesses referring to weak domestic demand suggested that the problem was fewer parcels and pallets being moved, rather than costs spiralling.
“That is arguably harder to fix,” he said.
“Expectations for October offer limited comfort. Only 6.1% of transport & storage firms expect turnover to rise, although that is up slightly from 4.6% last time. 16.4% expect a fall, up from 11.3%, and 28.6% are unsure.
“The share expecting no change has dropped from 62.8% to 48.9%.”
Jinks said this month should be the start of the run-in to peak trading, but fewer than one in 16 businesses expected any growth and more than a quarter said they were unable to call it: “With Black Friday and the Christmas rush approaching, the sector needs demand to arrive quickly.
“Manufacturers are starting to look ahead with confidence but logistics firms are still waiting for a reason to.”
However, Jinks added a note of optimism as the industry adapted to and embraced new technology: “While the short term outlook for the transport and storage sector shows some cause for concern, its rapid adoption of new technologies and strategies to adapt to the continuing growth of e-commerce means any dips are likely to be temporary,” he said.
“The longer term outlook for the sector is exciting.”
