Olympic Stadium CGI

Early reports show London 2012 didn’t result in the hoped-for volume growth for logistics

After the expectation, worry and planning, London 2012 has passed into history. Confounding expectations, the organisers delivered and the UK got behind the competition with uncharacteristic fervour. But while we can all take pride from the record medal haul, did this translate into more sorely needed business for Team Road Transport?

Nick Matthews, MD of Essex haulier Roadways Container Logistics, said: “While the Olympics was a success in many ways, volumes that had been predicted to increase due to the influx of visitors and increased sales were down on the periods before. What is interesting is that now the Olympics is over, volumes have bounced back up.”

Calm not bedlam

Herefordshire haulier ABE Ledbury said that although it was expecting Olympic bedlam, it found calm. Its customers sent only urgent freight into London during the got behind the competition Games. It meant overall turnover remained largely flat, with less freight heading into central London (freeing up fellow Palletline members in the capital to deliver on its behalf).

Lorraine Brooks, commercial manager at ABE Ledbury, said: “I was in London from the first Wednesday [of the Olympics] to the following Sunday and it was quiet. I never expected a quick win, but we would like to see a boost to the economy from the positivity and ‘hard work equals achievement’ attitude that surrounded the event.”

TfL’s message to stay away unless attending the Games was embraced a little too readily by the public during the first week of the Olympics. A change of tack in its communications came shortly after. Fears of a retail and spending wasteland followed, with anecdotal stories and research by the likes of Experian suggesting the event had flattened sales.

Retailers

However, at least one own-account operator looks to have prospered. The John Lewis Partnership, which owns supermarket chain Waitrose, reported sales for the second week of the Olympics went through the roof, buoyed 14.9% year-on-year to £60.75m.

However, the latest data from the British Retail Consortium (BRC) showed retail sales fell overall by 0.4% in August as the public stayed at home to watch the Olympics. “The feel-good factor from the Olympics failed to inspire spending,” said BRC director general Stephen Roberts.

Parcel carrier CitySprint saw delivery volumes drop in London during the Olympics. The company made 75,000 deliveries to London postcodes during the period, a 12% drop compared with the 15 days proceeding the event (23 June to 7 July). Chief executive Patrick Gallagher suggested the threat of traffic and congestion, as well as more people working from home during the period, had reduced demand for couriers.

Pallet network Pall-Ex said its London volumes fell in the capital during the Olympics. While nationwide volumes in the period rose 4.8%, pallet volumes in London were 6.2% lower year-on-year.

“We saw people stocking up before the Olympics,” said deputy chief executive Cris Stephenson.

“Given the performance during the Games, it’s likely the overall performance in London will finish flat or slightly worse.”

Pallet-Track MD Nigel Parkes said he was “surprised it was not higher in volumes than anticipated”, although he was pleased that deliveries had gone smoothly despite the feared congestion.

Nor was this just a London thing. Roadways’ Matthews said that despite his business avoiding London day-to-day, his containerised traffic volumes dropped by up to 20% between 16 July and 10 August. “We have seen volumes recover to the level before this period.”

London 2012 boost

Respondents to the FTA’s Quarterly Transport Activity Survey, compiled in July, said freight volume growth in the second quarter of the year was lower than anticipated. Despite this, the majority expected stronger growth in Q3, with many pinning hopes of a boost on a feel-good factor from London 2012.

However, research last month from market research firm GfK NOP concluded the Olympics had failed to boost consumer confidence, with its index registering -29 in August, the same level as the previous two months.

As MT went to press, the British Chambers of Commerce downgraded its prediction of marginal growth (0.1%) for the UK economy this year and said a contraction of 0.4% in 2012 was likely. It does not augur well for road transport, which through double-manning, staffing up, diligent planning and night-time deliveries ensured goods remained on the shelves this summer, but saw its margins take another hit.

While there will be a sporting legacy from London 2012, it would seem that the gold rush isn’t set to provide a sorely needed cash boost for the road transport sector.

  • The Office of the Traffic Commissioners introduced a fast-track O-licence approval scheme specific to the Games for any last-minute business operators couldn’t plan for under standard legislation. As MT went to press, there didn’t appear to have been a rush, with just 18 applications compared with the 84,072 goods operator licences held in the UK. Sarah Bell, traffic commissioner for the Western traffic area and Olympics lead, said: “Early indications are that operators heeded the advice and planned in time for the Games. I am pleased that the expedited process under section 16E was, and remains, available to operators that face the unexpected.”

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