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Logistics and Retail Updates

This series of updates aims to bring relevant government and industry statistics to life. As part of our assignments, we often help clients source both internal and external data, and then use it to drive logistics modelling, benchmarking, budgeting ...and action plans! To find out how we can help you by ringing 01295 758875 or contact us. If you'd like an alert when a fresh update is posted, ask us to email you or follow on Linkedin: Share On LinkedIn

A different type of Update!

5 December 2018

Here's a quick video I made for Linkedin telling you a bit about me and what I do:

FCs & Dark Stores

22 November 2018

I originally posted this pair of maps as a Maptitude Tip (which was about how you can import logos to use instead of dots or other symbols), but a few people have been in touch about it, so I thought I'd post a more general update and capitalise on the interest! See below the maps for more description.

Aricia Update - grocery ecommerce - Fulfilment Centres - Dark Stores - home deliveries - Amazon Fresh - Ocado - Tesco - Sainsbury - Asda - WAitrose - Iceland - November 2018 What this shows is various fulfilment centres and dark stores used by retailers and pureplay representing over three quarters of grocery ecommerce in the UK. Things to bear in mind are:

  • The total areas covered by the different companies are quite varied - ranging from selected juicy bits of London and the South East (Amazon Fresh - see update below dated 27 October 2018) to virtually nationwide (Tesco, Sainsbury, Asda)
  • An important aspect when considering these locations is that store-based retailers do also deliver from stores - often that will be the main fulfilment supply
  • How London-centric the UK's demographics are, with the M25 area broken out in the second map to the bottom right, but there's always that key factor to consider...
  • Availability and price of appropriate property - so, for instance, if you started with the postcode districts delivered to by Amazon Fresh, you might conclude that somewhere like Park Lane could be a great place to be, but it's unlikely to be a possibility in the foreseeable future!
  • Some companies are still growing and looking to expand the areas they can cover, for example in the North

Any comments or questions, please do get in touch!

Why don't people want to be HGV drivers?

10 November 2018

There is a driver crisis, but we need to tackle it rather than exaggerate. We need to make the jobs attractive. There are over 940K people with HGV licences and up to date medicals, including over 100K people aged 25-45 with C+E licences who choose not to use them. There is a crisis, not a shortage. If you want to understand the graph fully, then read my four-pager here: Driver Crisis, and you can visit this page if interested in other articles etc on the Driver Shortage.

Aricia Update - Driver Crisis - 10 November 2018 - driver numbers - driver ages - Logistics Statistics

Tomorrow is EU Equal Pay Day

2 November 2018

Let's pretend I’m part of a small export business in the UK called Badly Balanced Limited, with a total staff of 28 people. The nature of the business has changed recently, and although we used to shift a lot of pallets, the requirement now is for a multitude of smaller consignments. My staff breakdown is as follows:

  • 7 pickers – I have one lady called Anna (£8.83 per hr), who joined the business after it had changed to lighter work, and then Andy, Ben, Chris, Dan, Ewan and Fred (all on £9.91) - although they mainly work as pickers now, the men all have fork truck licences and still get paid a premium for that
  • 7 drivers – again, the business has been successful in attracting some ladies recently: Betty, Carol and Dora (£10.65) are all LGV drivers and drive identical trucks to the old-timers: Geoff, Harry, Ivan and John (£11.50). Because the latter group have been with the business a bit longer, they get a long service payment as part of their package, which was introduced to help with driver retention
  • 3 clerks – Edith, Fran and Gina (£12.08) – they are all brilliant at what they do – the business wouldn’t be where it is without them!
  • 4 managers – Karl, Leon, Matt and Nick (£14.22) – between them they run the operation including customer service, look after finance, sales & marketing and IT
  • 7 directors – it’s a family business. There’s four female directors: Helen (Strategy), Iris (HR), Joan (no-one’s quite sure of what Joan does any more, but she’s the eldest, close to retirement and we just let it roll) and Katy (that’s me, in charge of legal and compliance) – we all get the equivalent of £34.96 per hour. And then there’s the three men of the family Owen, Pete and Quinn - CEO, CFO and COO respectively who work out at £50 per hour each

Because I’m in charge of compliance, I got lumbered with filling in our Gender Pay Gap submission back in April. I don’t know what your impression is from reading the above, but I thought it was going to be embarrassing for our firm – the male pickers all get paid more than Anna; the male drivers get paid more than our ladies; no male clerks; no female managers; and then the top dogs paying themselves top dollar!

I had to calculate everyone’s hourly rate regardless of wages versus salaries and then the various statistics to report. I’d heard people say that the measures the government had chosen weren’t great, but didn’t really believe how poor they were until I’d worked it all out.

It’s great for Badly Balanced – lots of our stats look quite positive:

  • Median pay gap of -5% - negative, so in favour of women! You put all your male staff in a line in order of £/hr and pick the middle one, which is one of the drivers, Ivan, on £11.50. Then do the same with the ladies – Fran, one of our wonderful clerks, on £12.08. Then calculate (£11.50-£12.08) as a percent of £11.50
  • Mean pay gap of -7.3% - in favour of women again! The mean is what people would regard as the normal way of working out the average – put all the men’s hourly rates into a pot and divide by the number of males, then do the same with the women and compare in same way as above: (£18.37-£19.71) as percent of £18.37
  • And, although I know that our overall proportion of men to women isn’t even-stevens (it’s actually less than 40% female), when you look at that crucial top quartile (which is what everyone else is looking at!), we come in at 57% …in favour of women once again! What you do here is put all your staff, men and women, in the same row in order of £/hr and split that row into four equal bits – so our top quartile is seven people, ie the directors and there’s more sisters, so to speak

I can hear your brain whirring from here, wondering whether all of this matters. Well it does! Just because Badly Balanced illustrates that it’s possible for a badly balanced company’s stats to give a misleading picture, the fact remains that women in the EU still earn on average 16.2% less than men. EU Equal Pay Day is the day when the average woman stops getting paid compared to her average male colleague and works the rest of the year for free …with 16% of the working year remaining!

Tomorrow, 3 November, is EU Equal Pay Day. Sounds good? It’s not!

Do you live in the Amazon Fresh shadow?

27 October 2018

I was interested in looking at the area where Amazon Fresh was available in the UK – so I did what I always do in these circumstances: bunged it on a map. Fascinating commercial response to demographics! What’s interesting is the way that an area of lower incomes inside the M25 seems to cast a shadow beyond Slough and apparently stop the area being attractive territory. You can access my two-pager here: Amazon Fresh

Aricia Update - Amazon Fresh - 27 October 2018 - delivery area - Grocery Statistics - ecommerce statistics - Retail Statistics - Logistics Statistics

Reduced import pipeline = less food

8 September 2018

If there is a 4 minute additional delay as trucks clear Dover/Folkestone, the UK will have 5% less food. Not just 5% less food from the EU, but 5% less food in total – and that is probably an underestimate. No-deal Brexit will reduce the pipeline into the UK for food and other goods, not just on Day 1, not just in the first couple of weeks, but until we’ve established other sources. Obviously the impact could be much more significant.

Why am I writing this piece? Not because I’m a doom-monger, but because I’m concerned. I’ve not seen anyone else explore in any detail this aspect of a no-deal Brexit. You can read the full piece here: Reduced Pipeline and see the key graphic below showing how delays mean we need more trucks to do the same job or that there's a smaller pipeline:

Aricia Update Graphic - Brexit Impact - 8 September 2018 - Reduced Pipeline - Less Food - Logistics Statistics

Quick to cut, slow to recruit?

5 September 2018

At first glance the data released by the ONS (Office for National Statistics) during the past month on the number of people employed in transport and storage doesn't seem to tell any fresh stories. What it has shown since the financial crisis is that there was a much bigger comparative drop in the number of people employed in our sector than for the economy overall, and not just on a one-off basis.

The purple line (all in employment) on the graph below only really does a bit of a plateau following the collapse of Lehman Brothers et al. Whereas the red line (transport & storage) shows a drop of more than 12%, despite the increasing work content of burgeoning ecommerce. It's worth noting at this point that transport and storage does include passenger transport as well as logistics-related employment. It appears that our efficient and flexible transport & logistics industry was better and/or more able (compelled by cost control or perhaps because of low commitment to agency staff) at reducing personnel in a way that was not typical of the economy as a whole.

What also happened following the financial crash was that vacancies in transport and storage (not shown on graph, but in data released by the ONS at the same time) ran at a lower rate than for the economy in general. As a low margin industry we tend to use overtime as a first resort and hold off on recruitment until it becomes imperative. And the seasonal nature of our industry also means that we're loath to take on people for December who won't be needed come February. But, although we're back to a similar rate of vacancies per 100 employee jobs as the rest of the economy in this latest set of data, at peak last year we did move ahead and continue to have more than 40K vacancies (that's including warehouse staff and passenger transport), albeit still with a lower rate of vacancies than for a number of other sectors.

Aricia Update Graph - Transport & Storage Employment - 5 September 2018 - Vacancies - Logistics Statistics

Amazon - lots of logistics locations!

21 August 2018

With the news earlier this month that Amazon UK Services, which operates the fulfilment centres in the UK, increased its turnover to coming on £2 billion last year, it seemed to be the right time to have another look at Amazon's footprint in the UK.

Along with a lot of people, I'm really grateful for the wonderful work that MWPVL do each year in annotating known locations and pipeline around the world.

My map below, created using Maptitude, shows both Fulfilment Centres and the various other logistics operations. Although many of the headlines report huge sqft, these can include multiple structural mezzanines that have been rentalised - I've tried to bring all the figures back to footprint, to make them more comparable with other operations.

The map shows very good coverage of the UK - more than 92% of the UK's daytime population is within an hour of one sort of Amazon operation or another.

Aricia Update Graph - Amazon UK - 21 August 2018 - SqFt - MWPVL - Fulfilment Centres - Logistics Operations - Map - Logistics Statistics

Logistics labour leaps

18 July 2018

The biggest news when the ONS SPPI* was published earlier today, was that it's a month sooner than it used to be, which means it's pretty much contemporary with the period being reported - has to be good news!

Last time I produced an update on the SPPI I concentrated entirely on the road freight side of transport and storage, so this time I'm looking at the storage side.

What is interesting on this graph is the different directions that the two handling price indices have taken in comparison with storage rates, although I do need to add a note of caution here ...in retail logistics and similar, we tend to think of storage as warehousing but, in the SPPI, storage also includes bulk storage such as for liquid and gas.

What is interesting is the labour-related elements - while a ten percent increase over 5 years isn't really headline material, 9% over 2 years for cargo handling (the lilac line on this graph) has the makings of a news story and has clearly overtaken the all-services index.

Aricia Update Graph - Storage & Handling - SPPI - 18 July 2018 - ONS - Office for National Statistics - Logistics Statistics

*The Service Producers Price Index is a bit like the CPI - it shows the increase in prices and rates paid, but for services provided by businesses to other businesses and government. It provides a measure of inflation for the UK service sector with individual price indices, such as cargo handling, aggregated to create an all-services industry index. The SPPI is not seasonally adjusted, but I've displayed only the Q2 figures for each year (the most up-to-date figures for the SPPI which is a quarterly index) so they represent the same season year on year.

UK road freight: in a different ballpark

24 May 2018

Having flat-lined for over 5 years, the ONS SPPI* index for Road Freight prices (the bright pink line on the graph below) finally broke that mould when published yesterday and has definitely started to climb ...but by less than 1.25% over the past year.

In contrast, in Europe: "Transport prices in Europe in the first quarter were up 7.1 per cent on a year ago, latest figures from Transporeon reveal." reported Logistics Manager earlier this week. This, prior to the recent rises in diesel prices, with the CPI index for diesel going up by more than 1.25% from March to April.

UK road freight is also out of step with some of the other indices in the SPPI. The index for All Services* (in dark blue on the graph), and the indices for Railfreight (grey), National Post/Parcelforce (green) and Courier Services (orange), while taking different routes, all end up in the same ballpark.

UK road freight is in a completely different ballpark - surely rates must go up further sometime soon?

Aricia Update Graph - Road Freight - SPPI - 24 May 2018 - ONS - Office for National Statistics - Logistics Statistics

*The Service Producers Price Index is a bit like the CPI, it shows the increase in prices and rates paid, but for services provided by businesses to other businesses and government - the top level Gross / GSO index as shown on the graph includes the provision of a number of different services to other service businesses as well as to non-service businesses and government departments. It is published by the ONS (Office for National Statistics) and is a quarterly index, so the most recent figures are for 2018 Q1. This index is not seasonally adjusted, but the reporting of Q1 for each year should remove most, if not all, seasonal impact.

HGV versus van numbers

12 April 2018

Earlier today the statistics for licensed vehicles in Great Britain at the end of each quarter were updated by DfT and DVLA.

While HGVs continue to recover after the impact of the financial crash, it can be see that vans merely did a quick plateau before continuing their relentless rise.

The seasonality of truck replacement can also be seen clearly, maximising the number of vehicles available at peak each year. Interestingly for vans, although there is little seasonality, what there is looks to be weather (and therefore construction) related rather than driven by ecommerce.

Aricia Update Graph - HGV Van Numbers - 12 April 2018 - DfT - DVLA - Logistics Statistics - Transport Statistics

The gender pay gap

5 April 2018

The deadline has now passed and 10016 employers including more than 3000 companies with 250+ employees had submitted data by this morning. Of those, 406 were in transport and storage (SIC codes starting 49-53) including both logistics and passenger transport as well as storage and cargo handling for all modes. But whatever I report, the figures will continue to change – for instance, there were more than 70 organisations burning the midnight oil and making their submissions after 10 o'clock last night!

The choice of measures the government selected for this exercise are not great - I'm reminded of the old joke, that if you wanted to go there, you wouldn't start from here. But we are where we are. Continued below the graph.

Aricia Update Graph - Gender Pay Gap - 5 April 2018 - Logistics Statistics - Transport Statistics

Any pay gap figures I’ve used here refer to the difference in median hourly rates - the median is a better measure than mean for this, as it effectively removes the impact of a small group of low paid apprentices or a very highly paid CEO. The medians are established by putting all the women in one row in order of pay and picking the person in the middle, and similarly, but separately, for the men. A gender pay gap does not mean that women in the same role are being paid differently to men, it means that the median woman is being paid differently to the median man. If there are proportionately less senior women then the median woman is likely to be from a lower pay rate than the median man.

The median pay gap in transport and storage is lower than general - 6.65% compared with 9.9% across other sectors, and it would be lower still if a few companies that have featured in various headlines were excluded. But this piece isn't about naming and shaming!

The story that comes out for our sector is about lack of women generally (17.3% of employees compared with 49% across other sectors), and it's also about lack of women in senior positions - the proportion of women in our sector making it into higher paid brackets shows a bigger drop-off than average across other sectors.

Now, on the logistics side, you might argue that the lack of women is due to the physicality of some of the tasks that need to be undertaken, and indeed manoeuvring loaded roll-cages is referred to by one of the companies in its submission. But the proportion of females employed is actually lower for passenger transport, and any physical aspects of the job certainly don't explain why women aren't getting promoted to the same degree.

The submissions on what companies have found and what they intend to do will make interesting reading ...and next year will be the interesting one, as this year was a bit "bring out your dead"!

This update was a piece of research carried out on behalf of the Women in Logistics CILT forum and reported on CILT's website.

Road freight on the up

13 February 2018

Earlier today the ONS (Office for National Statistics) released the latest inflation figures, including those for business to business services. As can be seen, in the graph below, the index for the SPPI as a whole (the dark blue line = All Services Gross Sector - see the footnote* under the graph) has climbed more or less steadily for most of the past five years, ending some 5% higher over that period. I've also included indices for three categories of general business expenditure which have somehow returned to the same sorts of prices as five years ago: Translation & Interpretation Services (dark red line), Recruitment & Personnel Services (lighter blue) and Computer Services (grey). The most interesting is translation and interpretation, with the index showing a marked drop in Q2 2017, the quarter after Article 50. I don't know whether that is coincidence!

The index for Freight Transport by Road is shown as the bright pink line. With driver wages having risen after a period of stagnation (see update dated 14 November 2017 further down this page), the increase in the price of diesel could only mean one thing - road freight rates are finally on the up. After having been remarkably level for the previous four years, this index has risen steadily over the past 12 months and while that rise is low when compared with inflation generally, it has broken out of the previous recent territory it occupied.

Aricia Update Graph - Road Freight - SPPI - 13 February 2018 - ONS - Logistics Statistics

*The Service Producers Price Index is a bit like the CPI, it shows the increase in prices and rates paid, but for services provided by businesses to other businesses and government - the top level Gross / GSO index as shown on the graph includes the provision of a number of different services to other service businesses as well as to non-service businesses and government departments. It is a quarterly index, so the most recent figures are for 2017 Q4. This index is not seasonally adjusted.

Warehouse productivity - what can I say?

7 February 2018

Earlier today the ONS (Office for National Statistics) released new figures and analysis related to UK productivity including output by industry. The graph below shows those for Warehousing, going back to the start of what is currently available. What the graph shows is the average weekly hours in millions (purple line) on the left hand axis and £ output per hour (red line) on the right hand axis. So not about warehouse productivity at a location level, and nothing about what people in the industry get paid, but about what they output at UK-level, and it's important to say that the figures go up to Q3 2017 and are experimental. They are also seasonally adjusted (so the impact of Christmas etc should be removed) and the output is at current prices.

As you can see, there are areas of quite tight correlation, and then other areas where there is little (and even negative) correlation. Now, in the logistics industry, we all know that there have been changes in certain parts of our industry since the introduction of ecommerce with its singles picking and high level of returned goods to handle. And we also know that our industry is influenced by the economy as a whole. I've pulled out a few headlines in the boxes to show where these occurred.

I'm intrigued by the changes in the past few quarters, but have no answer for you, other than to wonder if this is down to the heavy discounting that is happening so widely these days - reducing the value of the output, but leaving the work content the same. What I can tell you (and it won't come as a surprise) is that the sector with the highest £ per hour output is Real Estate Activities.

Aricia Update Graph - Warehouse Productivity - 7 February 2018 - ONS - Logistics Statistics

The Rise & Rise of eCommerce

21 January 2018

This time last year, I published a similar graph, with the comment that the most boring graph in the world had suddenly had a little up-kick ...and that up-kick has continued. The purple line on the graph below shows the moving average of annual internet sales. The dotted 'trend' line is hand-drawn - from the start of the graph to the end of H1 2017 - the point at which the divergence from the earlier trend really started.

The ONS (Office for National Statistics) commented in its bulletin that accompanied the release of the latest retail sales figures, at the end of last week, that the proportion of internet spending is continuing to rise, with almost one in every five pounds spent online by the end of 2017. And that physical stores (including high street and supermarkets) provided the largest positive contribution to overall growth of internet sales in December.

However, the big question is profitability, with the need to accommodate Black Friday deals putting, for example, John Lewis under pressure, despite good sales.

Aricia Update Graph - Internet Sales - Retail Sales - 21 January 2018 - ONS - Retail Statistics

Global airfreight takes off again

9 December 2017

Earlier this week, IATA (the International Air Transport Association) published its latest annual statistics for both passenger and cargo. The graph below shows the revenue and volume for global airfreight for the period published - from 2006 through to an estimate for 2017 and a forecast for 2018. While not having returned to post-recession highs, airfreight revenues definitely look to be back on the up.

There were two interesting pieces of commentary back in 2016 on some of the changes taking place in the industry. Although you don't see a reduction of tonnage at a global level, Seabury Consulting (see slide 24) commented on the way that lighter weight mobile phones have overtaken laptops, leading to overall lower tonnages shipped, and the Loadstar addressed the issue of falling revenues saying that "slowing production, overcapacity, and a lack of ‘hot’ consumer must-haves" was causing air freight rates to sink to some of the lowest levels seen in years.

IATA comments on the upturn in 2017 saying that "the boost to cargo volumes in 2017 was a result of companies needing to restock inventories quickly to meet unexpectedly strong demand", and while it doesn't expect the rate of increase to remain the same, it does expect growth to continue into 2018.

Aricia Update Graph - 9 December 2017 - IATA - International Air Transport Association - Airfreight - Air Cargo - Logistics Statistics

Thanks to Singapore Airlines Cargo website for the cheeky airplane pic!

Please feel free to share:

Amazon Into Space

24 November 2017

Black Friday seems like an appropriate time to publish this update, on the logistics property that Amazon has accumulated in Britain over the years - often quietly, sometimes not - particularly more recently. I've made my best efforts with this graph, but I know it will contain errors where it's not quite clear how big a property is (do you count square footage for different floors for an exercise like this? I've tried not to). And it will already be out of date - partly because the Amazon world moves so fast and partly because there are some locations for which I've just not been able to find the square footage.

Most of the data has been sourced from this amazing resource on MWPVL's website, but then I've also done some Googling of my own, updating some figures, adding in new ones...

If the graph looks like it's showing a slowdown, don't be fooled - 2018 hasn't happened yet and internet shopping just carries on and up!

Aricia Update Graph - 24 November 2017 - Amazon - Fulfilment Centre - Delivery Station - Property - square footage - Logistics Statistics

Market Elasticity?

14 November 2017

I thought I'd do an update on the SPPI* quarterly figures, fresh out today from ONS (Office for National Statistics), and started with the index for Freight Transport by Road (pink line on graph below) ...totally boring - up a bit compared with last year, so not quite flat-lining, but hardly news. As per my road transport rates update at this time last year I decided to look at the key components - fuel, driver wages and price of trucks ...although of course this last element will probably have to be revised backwards when the various cartel court cases have concluded, so I've left it out in the graph!

In doing this I found that the FTA is no longer publishing bulk fuel prices on its website (boohoo - this has been a trusted free source of benchmarking info for many a year), although I've since had a very good conversation with Portland Analytics about the pay-for services that they offer in this area. For today, I've just used the AA Pump Prices (green line), which are what they say on the tin, pump prices, but converted into an index show the right sort of increase / decrease year by year.

I also found an interesting report while on the FTA's website, which I managed to miss at the time - back in July, the FTA published its latest Skills Shortage Report, which contains various key indicators including (reading between the lines) that there's been an increase of more than 25K UK-born people working as LGV drivers between Q4 2015 and Q4 2016 (and a similar increase in UK-born van drivers). The FTA's own figures suggest that the rates being paid may have dropped back again, but looking at the figures from Croner Distribution & Transport Rewards survey (orange line), one can't help wondering if that thing called 'market elasticity' isn't at work ...paying more, and in turn making driving more attractive as a job!

Aricia Update Graph - SPPI - Service Producers Price Index - 14 November 2017 - ONS - Diesel - HGV driver wages - artic unit capital cost - Logistics Statistics

*The Service Producers Price Index is a bit like the CPI - it shows the increase in prices and rates paid, but for services provided by businesses to other businesses and government. It provides a measure of inflation for the UK service sector with individual price indices, such as Freight transport by road, aggregated to create a service industry index. The SPPI is not seasonally adjusted, but I've displayed only the Q3 figures for each year (the most up-to-date figures for the SPPI which is a quarterly index) so they represent the same season year on year.

If you found this piece interesting, you may be interested in our page on the driver crisis.

Update on driver numbers

21 August 2017

Last week the BBC carried the news that UK unemployment has fallen to a 42-year low, and I imagine that there are people in the logistics industry thinking that the driver crisis will get worse.

During August, two stats that are of interest to the road transport industry have been released by the ONS: the SPPI index for freight transport by road and the number of people working as LGV drivers. Earlier this summer, and for the first time in over a year, the figures for the number of people with LGV licences was released by DVLA. And also, during the spring, the FTA's Logistics Report 2017.

The graph below shows the various driver related-figures - the number of C&CE licences (on the left hand side) is for GB only, the number of people working as large goods vehicle drivers (the middle block) is for the UK including Northern Ireland. The relative size of the 'shortage' can clearly be seen - the tiny block on the right hand side of the graph.

This update continues below the graph...

Aricia Update Graph - driver numbers - HGV - LGV - DVLA - DfT - ONS - FTA - 21 August 2017 Logistics Statistics

The number of licences held is for people with medicals, but not necessarily DQCs ...so it would take just a week's training, with no test, for that not to be an issue if someone wanted to get work in our industry. It looks as if CE(db) is drivers with a 102 code - ie restricted to drawbars, although I'd like to see that in writing. It doesn't include more than a quarter million provisional LGV licences.

What the SPPI index for freight transport by road shows (not on the graph) is that haulage rates have risen by less than 1% over the whole of the past five years.

Brexit is coming and the driver crisis is not about to solve itself - something has to change.

You can find the various sets of statistics here:

If you found this piece interesting, you may be interested in our page on the driver crisis.

London Logistics

3 August 2017

I've only just made time to read the 'Feeding London 2030' report commissioned by UKWA some while back - I was interested as soon as I was aware of it, and with emails currently coming in from various industry sources about clean air zones and banning diesel vans, now seemed like the right time.

I've been involved in more than one project around the difficulties of delivering in the capital, including for a foodservice company looking to establish an operation to serve London - this project had a particular focus on the legal restrictions: congestion charging and U/LEZ zones, weight limits including on and adjacent to London bridges, red routes, the so-called 'night lorry ban', the safer lorry scheme, multiple local un/loading restrictions (and the risk of PCNs), and the City of London Corporation 7.5T MGW limit in its central area, unless you need access to un/load. Oh, and then things like the wonderfully toll-free Woolwich ferry, the key link for the North and South circulars, not operating at night - not a legal issue, but pretty important.

To continue reading, please click on the picture below.

Aricia Update - London Logistics - UKWA report - Feeding London 2030 - Foodservice - Construction logistics

One Industry - Five Different Stories

3 May 2017

They might be operating in the same sort of sector, but you can immediately see that the stories told by the traces on this graph are all different ones - home delivery of fashion is by no means a straightforward offer if you're the customer.

The graph below shows the change in order cut-off times and charges to the customer at three points over the past 8 years for next day delivery of fashion in the UK from five retailers: ASOS, Harvey Nichols, House of Fraser, Jigsaw and John Lewis. The various colours indicate the retailer, with the cut-off time on the x-axis and the charge on the y-axis. The width of the trace indicates the year, with the widest being 2017 to draw your attention to the current position (see legend top right). Continued below graph...

So what's going on? Starting at the top of the legend and the bottom of the graph, with ASOS (blue) - the charge has remained the lowest at the three dates sampled in 2009, 2014 and 2017, and the last order cut-off has pushed out later and later until now it's midnight. Harvey Nichols (red) is two spots rather than a trace as it wasn't offering a next day service in 2014 (what would have been the mid-point if it had been a line), and currently has one of the earliest cut-offs and the highest charge, but I guess if you shop there you can afford it. House of Fraser (green) offers a later cut-off and a lower price than it used to do. Jigsaw (purple) has retreated from its 2014 order cut-off, but stuck with the same price point over the years. And finally John Lewis Partnership (orange) has pushed the order cut-off back to 8pm and slightly increased its charge.

I guess at the end of the day it's what works for a combination of the place that you occupy in the market, the sophistication of your systems, the service that your volume commands, the extent to which you regard home shopping as integral to your customer offer, the extent to which you're trying to cover your costs ...and a multitude of other factors. But there's no trend or stereotype - intuitive it isn't.

£50BN & A Cheeky Little Up-kick!

25 January 2017

When the retail sales figures for the crucial December trading period were published by the ONS (Office for National Statistics) last week, there seemed to be quite a lot of confusion and criticism.

The ONS go to a great deal of effort to make sure that their figures are representative, and retail sales data is collected from approx 5K retailers, including all of the large ones and a representative sample of smaller ones. While this includes only 2.5% of businesses in the industry, it is estimated to cover c93% of known turnover.

So you could say, well, if there's a problem then it's down to GIGO - garbage in, garbage out. But it seems as if that's not the case and that it's more about what assumptions are made about the results presented, with Verdict jumping in with an explanation.

Anyway, in all that kerfuffle, I didn't see any reports of what I thought were the two most interesting things hidden in all those figures:

1) For the first time the annual internet sales for Great Britain rose above £50Bn per annum (with the lack of reporting being, at least in part, down to how these figures are presented in the ONS release), and

2) The most boring graph in the world (see below) suddenly stopped its inexorable rise ...to accelerate into a cheeky little up-kick!

Aricia Update Graph - Internet Sales - Retail Sales - 25 January 2017 - ONS - Verdict - Retail Statistics

Hiding Our Heads in the Sand?

17 January 2017

Earlier today the ONS (Office for National Statistics) published the latest inflation figures. All the headlines are about the CPI. the Consumer Price Index. It's understandable in part - that's what affects how far the pound in the pocket goes, and it's what the Bank of England is targeted to influence. But the real news is the PPI, the Producer Price Index*, and in particular what's happened to input prices over the past year.

Inflation in factory gate prices was 2.7% for the year to December 2016, so ahead of the CPI at 1.6%, but not particularly scary. But the overall inflation on prices for materials and fuels paid by UK manufacturers for processing (input prices) was 15.8% for the year, largely as a result of exchange rates and the price of crude. The graph below shows that the headlines should be about the constituent parts of PPI input - imported metals up 36.2% and crude oil 56.7%.

So, as a nation, are we hiding our heads in the sand by ignoring these input figures? Actually, turns out sand would be a good place to be, with only circa 1% inflation in those sorts of supplies over the past year.

Aricia Update Graph - PPI - Producer Price Index - 17 January 2017 - ONS - Inflation - Crude Oil - Manufacturing Statistics

*The PPI consists of two main measures - here's the ONS own description of them:

The factory gate price (output price) is the amount received by UK manufacturers for the goods that they sell to the domestic market. It includes the margin that businesses make on goods, in addition to costs such as labour, raw materials and energy, as well as interest on loans, site or building maintenance, or rent.

The input price measures the price of materials and fuels bought by UK manufacturers for processing. It includes materials and fuels that are both imported or sourced within the domestic market. It is also not limited to materials used in the final product, but includes what is required by businesses in their normal day-to-day running, such as fuels.

Low Footfall

5 January 2017

Earlier today IPSOS Retail Performance published a piece which reported that footfall on the UK high street was 9.3% down on December 2015

I can well believe that, having gone shopping at Banbury Gateway Retail Park on Saturday 17 December - to say that it was dead was to put it mildly - I've put together a document with some photos I took. The pictures aren't great for a couple of reasons - photography is not a core skill of mine and I was only taking the pics to show my husband how empty it was. As time went on, I did get into my theme, so I fully admit that I waited for a shopper to get out of the way for one or two of the later shots ...but partly so they didn't think I was snapping them as individuals! Here are my pics.

What were your Christmas shopping experiences like?

Road Freight Flatlining

29 November 2016

Last week the ONS (Office for National Statistics) published the latest SPPI* figures, and I was struck by how little movement there has been in the road freight element of the index over the past few years. You can see this (the bright pink broken line) in the graph below and also some major constituent costs of road transport. The SPPI is not seasonally adjusted, but I've displayed only the Q3 figures for each year (the most up-to-date figures for the SPPI which is a quarterly index) so they represent the same season year on year.

In terms of the major constituent costs, I've included driver wages (two sources** in shades of yellow/brown); the purchase cost of an artic unit (another two sources** in shades of blue); and diesel (two alternative sources** in shades of green). All of the costs have been brought back to an index of 100 for 2012 so that the relative movement can easily be seen.

While wages have increased over the past four years and the cost of the tractor element of the truck has ended up at about the same as 2012 (although with alternative sources indicating different price movements during that period), diesel has dropped dramatically to less than 80% of the price it was in 2012.

It's interesting that the result of all these ups and downs is what your local hospital would call "flatlining"! How does this compare with your experience?

Aricia Update Graph - SPPI - Service Producers Price Index - 29 November 2016 - ONS - Diesel - HGV driver wages - artic unit capital cost - Logistics Statistics

*The Service Producers Price Index is a bit like the CPI - it shows the increase in prices and rates paid, but for services provided by businesses to other businesses and government. It provides a measure of inflation for the UK service sector with individual price indices, such as Freight transport by road, aggregated to create a service industry index. It does not aim to provide full coverage of the "service sector" - the primary use of the SPPI is as a deflator in the UK National Accounts.

**Sources for data for the cost breakdown elements are as follows:

Croner LGV C+E driver average weekly earnings - Croner Distribution & Transport Rewards

FTA LGV driver pay gross weekly - FTA Report on The Driver Shortage: Issues and Trends

MT 44T unit 6x2 - Motor Transport annual cost tables

RHA 44T unit 6x2 - RHA annual cost tables

AA Pump Diesel (Aug) - AA Fuel Price Report

FTA Bulk diesel (on or near 16 Aug) - FTA Fuel Price Information

8 Out of 10 Employees..

11 November 2016

Following my previous post, someone asked me about how pay relates to hours worked, so I've combined two of the many data sets from the Office for National Statistics' Annual Survey of Hours & Earnings in the diagram below.

What are the boxes in the diagram all about? It's my attempt to show the span of hours and span of pay for most people working in the UK as a whole and for some specific occupations. Unlike the previous update, I've used the figures for all employees (not just full-time). See below the diagram for a description of how to read the it.

Aricia Update Diagram - ASHE - Annual Survey of Hours & Earnings - 11 November 2016 - ONS - Hours - Wages - Logistics Statistics

On the x-axis is paid hours worked per week - the span of each box goes from the figure for the 10th percentile through to the 90th - you can see the previous update for a description of percentiles, but if we look at the red box for the UK as a whole, it means that 80% of employees work somewhere in that span of hours (so it excludes the extremes at each end). And the y-axis shows gross weekly pay, and again the span runs from the 10th to 90th percentiles, so that 80% of employees get paid somewhere in that span.

It's important to note that it will be a different 80% for the x and y elements of each box, but there will be a broad overlap. Also, note that for ease of representation, the boxes go to the nearest 2.5hrs and the nearest £50. And it'simportant to consider that this is for "paid hours per week" - it is quite likely that, for instance, managers and directors may well be working more hours than they are technically paid for.

I've included particular occupations for particular reasons:

  • UK (Red) = All employees - and note the red spot which marks both median hours and median pay - so 50% of people in the UK have less paid hours per week and 50% of people have less gross weekly pay than indicated by the spot
  • Code 82 (Blue) = Transport and mobile machine drivers and operatives - as we saw before, this group has the highest hours at the 90th percentile and will include HGV drivers
  • Code 92 (Green) = Elementary administration and service occupations - included as both the lowest hours at the 10th percentile and the lowest paid at the 10th percentile
  • Code 11 (Grey) = Corporate managers and directors - the highest paid at the 90th percentile
  • Code 8 (Yellow) = Process, plant and machine operatives - the second highest hours at the 90th percentile

NB ASHE covers employee jobs in the United Kingdom - it does not cover the self-employed, nor does it cover employees not paid during the reference period.