Over 10% of Transport & Storage Firms Cut Prices in October
In an ONS survey held before this week's contentious Autumn Budget, fewer transport & storage companies said they are expecting an increase in turnover in December than any comparable sector, while a surprise 10.9% reduced the price of their services in October. This was significantly more than any other business sector, says the home delivery expert Parcelhero. A significant 10.9% of transport & storage sector companies reduced the prices of their services in October compared to September, according to shock new results from the latest Office of National Statistics (ONS) Business Insights survey.
The home delivery expert Parcelhero says that significantly more transport & storage firms cut their prices than any other business sector and considerably in excess of their retail and manufacturing partners. Equally, when they were asked in October, fewer transport & storage businesses (the category which includes logistics, parcels, haulage and warehousing firms) said they were expecting an increase in turnover in December than any comparable sector. Transport & storage firms look set to miss out on the Christmas cheer this year, says Parcelhero.
Parcelhero's Head of Consumer Research, David Jinks M.I.L.T., says: 'The fact that nearly 11% of transport & storage sector businesses felt the need to cut their prices in October highlights the tough market conditions they are facing. 'In sharp contrast, only 3.3% of manufacturers and 1.7% of retailers reduced the prices of their goods and services. The logistics sector appears to be facing uniquely challenging times, largely because of the tight margins and demanding KPIs built into many contracts. These issues will not be helped by some of the announcements made in this week's Autumn Budget, particularly the planned increase in fuel duty which will squeeze margins still further.
'In addition, 8.6% of manufacturers and 12.5% of retailers reported they had actually increased the prices of their goods and services, compared to just 1% of transport & storage sector firms who felt in a strong enough position to do this. 'The results are also in sharp contrast to the previous month, September, when only 1.9% of transport & storage companies reported that they felt the need to cut their prices, fewer than their manufacturing and retail partners.
5.6% of manufacturers and 2.7% of retailers reduced their prices in September. 'It could be argued that transport & storage sector firms reduced their prices in October from a position of strength and optimism in the market but that seems unlikely.
Looking ahead to December which is, of course, still the seasonal peak for many delivery companies, only 9.5% of transport & storage companies responding in October predicted that their turnover is likely to increase in December, compared to 13.3% of manufacturers and a whopping 18.3% of retailers. 'Considering December is the pinnacle of the Christmas peak, these are gloomy predictions from the supply chain professionals completing the ONS survey. It looks as if many transport & storage sector firms fear they are set to miss out on the seasonal bump this year.
'One certainty is that it will be those transport & storage companies that are partnered with retailers and manufacturers with strong in-store and online sales that will ultimately triumph.
Parcelhero's influential report "2030: Death of the High Street" has been discussed in Parliament.
It reveals that retailers must develop an omnichannel approach, embracing both online and physical store sales.
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