The logistics and transport sector has had a particularly challenging year, due to Brexit and coronavirus issues, which both had a considerable impact.

But it has adapted to change, there have been some notable successes and the sector is expected to bounce back in the next few years, as Andrew Hosking, a managing director in our restructuring and insolvency division observes.

The outlook for the logistics and transport sector is generally positive, with the anticipation of relatively fast growth – our forecast is for 3% on average over the next few years. Recovery in the retail sector will create even more of a shift to shop online, which in turn will drive the volume of goods to be distributed, which will boost logistics and transport.
Stresses, strains and success stories
However, in the meantime, the sector continues to encounter some hitches. One is the higher level of paperwork involved in exporting to and importing from Europe, as a result of Brexit. There is also circumstances. For instance, we’ve also seen UK lorry drivers not allowed into France because of the UK variant of coronavirus. And, as an example of Brexit paperwork issues, we’ve also seen how the fishing industry has been affected, with stock for export being wasted due to delays caused by form-filling glitches.
Another strain placed on the industry due to coronavirus was the human factor. For a while, initially, it was difficult to obtain the number of drivers needed to deal with distribution requirements – particularly with regard to the high levels of panic buying seen at the start of the pandemic. There was also the impact of the virus itself; the sector had to ensure it took measures to reduce interaction of drivers with other colleagues, for instance when delivering to supermarkets, to keep levels of infection down.
This is a sector, therefore, that will be relatively slow to regain or surpass its total value of output recorded before the health crisis and is unlikely to regain its pre-pandemic heights until around 2025.
However, in the meantime, warehousing has been one of the success stories of the logistics sector. Amazon and others have overcome phenomenal logistical challenges during the pandemic, and perfected them; this sector of the industry is likely to continue to increase and excel.
To sum up, while there are positive signs for the sector, some of its businesses will also have to contend with the damage that coronavirus will leave in its wake. What will happen when furlough ends, for example, and when loans such as CBILS and bounce-back loans have to be paid back? VAT deferment will also have to be dealt with at some point too. There is, therefore, a high level of uncertainty affecting the sector at the moment.
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