TAKEAWAYS
A new report by Barclays Corporate Banking finds that nearly half of all UK logistics businesses are likely to make an acquisition in the next 12 months as they look to expand operations and become more competitive—the highest figure recorded in the survey’s 10-year history. The survey also reveals that despite the challenges facing the logistics sector, three out of five companies expect their turnover to increase in the coming year. 80% of respondents are concerned with labor shortages, which are set to have a major impact. In fact, concerns over a dearth of workers have led nine in 10 firms to improve pay and conditions for their workforce. The most sought-after roles are drivers and warehouse sta, followed by oce and admin sta. Competition for talent was so high that drivers qualified to drive the heaviest vehicles saw advertised salaries increase by an average of 25% in the past year alone (Q1 2022 vs Q1 2021). Somewhat surprisingly, against a gloomy economic outlook, a small majority of logistics businesses are optimistic about the outlook for the coming year, compared with those who are pessimistic. High inflation and rising costs impact profitability levels, as just fewer than half (45%) of logistics companies say their margins will improve in the next 12 months, compared with 62% this time last year. Meanwhile, almost one-third (30%) anticipate a drop in profitability, up by 11% from 2021. ACQUIRING MINDS WANT TO KNOW
Nearshoring Picks Up Steam All of the global supply chain snafus that have taken place over the past two years have caused many manufacturers to reexamine their supply chain and production networks. The question they all seem to be asking is: Should we bring production closer to consumption? A new report from Accenture indicates that answer is “yes.” Gathering responses from more than 1,000 executives at companies with U.S. operations and revenues greater than $1 billion, the report nds companies are shifting their manufacturing back onshore, nearshore, and to new “friend-shoring” (countries that are allies/friends of the United States) locations. The reasons cited for doing so include the pandemic, trade wars and tariffs, rising labor costs, tech innovation, the war in Ukraine, the climate crisis, and changing customer expectations. Here’s a closer look at the key ndings: • 94% of companies are planning direct investment in onshoring or nearshoring. • 85% want their factories and incoming material sources to be in the same hemisphere, while 78% want their factories to be within four time zones of the customer.
• 54% say manufacturing closer to home is key to survival. • 1% say they can continue to grow with their current manufacturing footprint.
To make these nearshoring plans work, survey respondents report a focus on large-scale digital transformations of their supply chains as well as a switch to “smart” factories. These executives also say a new type of workforce will be required and that companies will need many more automation and robotics technicians. “There is still such a great deal of untapped potential in the circular economy. Supply chain leaders can use the inflationary environment as a catalyst to reshape their relationship with materials. Instead of losing materials out of the economy in the form of waste, the circular economy helps capture value.” —Sarah Watt, VP Analyst, Gartner Supply Chain Practice
20 Inbound Logistics • November 2022
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