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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

Covid + ecom -> Automation

17 May 2021

Despite or because of Covid, the total revenue of this year's Top 20 Materials Handling Systems Suppliers continued to grow, easily topping the $25Bn mark.

There are two entries ranked as No 10 (and therefore none for No 11), there are new entries and some changes in position, but there's no point in me describing all this, when you can go straight to the oracle and read about it in Modern Materials Handling published just a few days ago!

Aricia Update - Moderns - Material Handling - Top 20 - 17 May 2021 - Logistics Statistics

Those heady days...

22 March 2021

Do you remember those heady days of January 2016? It’s an important date, as that was the last time the nation was feeling vaguely good, and it hadn’t been for very long following the financial crash.

Every month GfK reports on its UK Consumer Confidence Index, with the latest report out at the end of last week. As you can see from the graph, although there has been a massive increase in confidence since November, the barometer is still in negative territory, so I went back through GfK's press releases to find out when the index had last been positive and started the graph from there. The index is based on questions posed to a representative sample of c2000 people – the various areas asked about are detailed in the little box on the graph, along with their relative positions to the previous month. NB The sort of goods that are referred to as major purchases are things such as furniture or electrical goods.

According to the House of Commons Library research briefing on Business & Consumer Confidence Business & Consumer Confidence, this GfK research is carried out on behalf of the European Commission, but I think that’s just sloppy reporting, as I don’t believe that to have been the case since the UK left the EU. Business and consumer confidence surveys are leading indicators and can point to changes to the economic outlook as well as turning points in the economic cycle ahead of official data.

Fingers crossed that things carry on going up!

Aricia Update - GfK - Consumer Confidence - 22 March 2021 - Retail Statistics

Now versus 'normal'

23 February 2021

So which industries have benefited over the past year in terms of the number of people employed? Earlier today the ONS published various employment figures relating to the last quarter of 2020.

And the answer to that question, is that over the past year, the area with the highest proportional growth in jobs was Financial & insurance activities followed by Public admin & defence & social security. The sector which lost the largest percentage of jobs was, unsurprisingly Accommodation & food services, and after that Manufacturing.

What the graph below shows is some significant dates rather than evenly spread - 1997 being the first year these figures are available, 2007 before the financial crash, 2012 the point at which construction hit its low before starting to grow again, 2019 representing 'normal' in our memories, and 2020 being the most recent data. The figures are not seasonally adjusted, but using the same quarter each year should mean that they are comparable.

Continued below graph...

Aricia Update - Jobs  by industry - Transport & storage - 23 February 2021 - Employment Statistics

All the bars are percentages of 2019 = 'normal' for that particular sector. So by definition, all bars for 2019 come up exactly to the 100% line shown in green. The sectors are in order from those that gained the highest percentage of jobs over the past year through to those that lost the most. I've highlighted with a red surround the bars for 'All employed' - a different measure of normal.

Perhaps surprisingly Human health & social work activities is not one of those areas that gains jobs over the past year. Transport & storage is pretty 'normal' in the number of jobs lost. But what the graph also highlights, is the shocking loss of jobs in manufacturing over the past couple of decades.

Where to start?

1 February 2021

So what story shall I tell you about this data? Where to start? And that’s the crucial question!

I did a post a couple of weeks ago on Linkedin about perspective, and that’s a really appropriate word to use with relationship to this update. In December every year, Motor Transport releases its annual cost tables and, in January, the ONS released the latest SPPI data including all of 2020 - the SPPI is like the CPI but for business & government expenditure, rather than individuals.

If I start the graph in 2013, as shown, with all elements starting at an index of 100, then my story is that road freight rates have ended up rising pretty much in line with the inflation rate for business expenditure as a whole, but that road freight costs, while more erratic, are down in 2020 - driven by the price of diesel. See below the graph for a description of all the elements.

Whereas if I had started the same graph in 2015 with all elements at 100, my story would be a very different one: it would be about rates rising faster than general business inflation, but not keeping abreast of costs, and with diesel at a slightly higher rate in 2020 compared with 2015.

Which story should I tell? They do say you can tell any story you like with statistics!

Aricia Update - Motor Transport - Cost Tables - SPPI - Road Freight Costs - 1 February 2021 - Logistics Statistics

This graph shows the overall pence per mile costs of running a 44T unit and triaxle trailer (dark blue, thick line), and the major constituents of diesel as pence per litre (black), driver wages & NI (light grey), and depreciation & financing for the unit & trailer (dark grey) – these are all from the Motor Transport Cost Tables. It also shows the SPPI index for Freight Transport Services by Road (light blue, thick line) and the SPPI as a whole (green) – the SPPI is like the CPI but for business & government expenditure, rather than individuals. These are all shown as indices brought back to 100 in 2013 and changing up or down with inflation in subsequent years.

More Sitting Bull than Whale!

28 December 2020

The Motor Transport Top 100 for 2020 was published recently and, having written a piece about the Whale graph for SHD Logistics, also published in December, I thought I’d apply the same sort of analysis.

I put the 100 companies in order of percentage pre-tax profitability (on the x-axis) against the cumulative pre-tax profit of the Top 100 on the y-axis - what emerges is not so much whale as sitting bull! What emerges is that 80% of the Top 100 made all the profit, and the remaining 20% eroded it. 80% of those companies made £860m profit, but the remaining 20% then lost over £400m to end up with an overall profit for the Top 100 of just over £450m. Continued below graph...

Aricia Update - Motor Transport - Top 100 - profit - 28 December 2020 - Logistics Statistics

Just one company has been solely responsible for over 50% of the losses, Eddie Stobart, which has since received financing from Dbay. Three of the other four companies that made more than 10% loss, have since collapsed or changed hands.

Eddie Stobart’s annual report emphasises the importance of keeping your eye on the ball: “The warehousing strategy also distracted key management from activities in the core business, including assessing new contracts and the maximisation of the efficiency of our transport network.”

It’s not clear whether rates weren’t in line with market values or whether costs got away from rates – assuming the former, it looks like the company should have been charging about a third more for its services if it wanted to make the average pre-tax profit of the profit-making companies which, incidentally, is less than the 5% profit (that’s pre-tax profit!) suggested by Motor Transport’s cost tables published in the same issue.

Motor Transport makes the point that “The figures for this year’s Top 100 come mainly from companies’ 2019 accounts and so are not affected by the Covid-19 crisis”, but also that “One clear impact of Covid-19 is that fact that a few companies have been slower than normal to file their latest accounts at Companies House.”. I have queried, with Motor Transport, Royal Mail’s UK arm’s pre-tax profit being put in at exactly zero (I’m always suspicious of very round numbers!), but I’d be the first to say that I don’t envy the person who has to create the Top 100 each year, extracting all that data from annual reports.

X marks the spot!

22 December 2020

There are three changes of direction on this graph. The first kink is in May and is when Covid testing moved from targeted to being more widely available. And the one right at the end is just lag between reporting of tests and identification of cases. But what caused the one in the middle? Three out of my last four statistical updates have been on Covid rather than logistics - people will begin to think I've got a bit of a thing about it, but the way my mind works is that if there's data, I have to find the story!

I'd seen this pattern ages ago and thought it was probably about kids and students going back to school and university, and perhaps because young people seem less affected we were suddenly seeing a lot more asymptomatic cases ...perhaps that's what the experts thought. But the change of direction in the middle is now much more comprehensible, because now we know that there was a new Covid variant...

According to New Scientist: "It was first sequenced in the UK on 20 September, but only caught the attention of scientists on 8 December, when they were looking for reasons for the rapid growth of cases in southeast England." See below the graph for how it works...

Aricia Update - Covid - Tests - Cases - New Variant - 22 December 2020 - Statistics

This scatter graph contains data from the UK government website from yesterday's update. It has cumulative tests on the x-axis versus cumulative cases on the y-axis - because it's cumulative, you lose all the daily wobbles and it also means that the graph is sequential as it moves across the page. There is a small ring representing each day from end of March to 20 December, and I've coloured up each ring by month so you can see how things progress - the white space in the centre of the later rings shows the extent to which Covid has been growing more recently. I've also highlighted with a cross the entry that represents 20 September, the day the new variant was discovered.

I'm not a health expert so I'm not going to comment further other than to say that, if this was hours versus orders in a DC, someone would have been all over it from October latest!

Is this why people don't work as HGV drivers?

8 December 2020

Yesterday the Office for National Statistics published some estimates from its Annual Survey of Hours and Earnings (ASHE). I've combined two of the many data sets 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 full time employees working in the UK as a whole and for some specific occupations. See below the diagram for a description of how to read it.

Aricia Update Diagram - ASHE - Annual Survey of Hours & Earnings - 8 December 2020 - 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 - 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.

Note the red spot which marks both median hours and median pay - so 50% of employees in the UK work less paid hours per week and 50% of employees get less gross weekly pay than indicated by the spot. You can see that FLT drivers are virtually all working more hours than the UK average, and that HGV drivers work considerably more!

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. Hourly and weekly estimates are provided for the pay period that included a specified date in April. They relate to employees on adult rates of pay, whose earnings for the survey pay period were not affected by absence. Estimates for 2020 include employees who have been furloughed under the Coronavirus Job Retention Scheme (CJRS). The forklift truck driver entry is described as an estimate as the ONS has not tried to estimate the 90th percentile for either pay or hours - I have based them on the other storage occupation shown.

Find out a more about the sort of projects we work on: Case Studies.

Wear a mask ...for your own sake!

4 December 2020

I don’t usually do two non-logistics updates running, but having had my interest piqued yesterday (next post down on this page), I did a little more research on hospital admissions for Covid versus mask wearing, or face covering if you prefer. This piece is not about the extent to which wearing a mask prevents or reduces transmission, but about the impact that mask wearing appears to have on the seriousness of Covid cases. And I need to emphasise again that I’m not a health expert, although this is a very good example of the sort of data detective work I can carry out, more usually as part of logistics projects.

I’ve combined two separate data sets in this graph. One data set on admissions and cases is from the government’s Covid data dashboard and the other, the proportion of people wearing masks, is from the ONS (Office of National Statistics). Continued below graph...

Aricia Update - Covid - Cases - Admissions - Masks - Statistics

What the graph shows is the relationship between the proportion of people that need to be admitted to hospital when they have Covid compared to the proportion of the population wearing face coverings. Each spot represents a particular point in time – the ONS data has only been collected since late May and is for working weeks, so some are 4 days and some 5, and not all weeks are included. I’ve matched up the Covid data by taking a 7 day period and doing my best to match the mid points. I’ve continued to use hospital admissions rather than deaths – in yesterday’s analysis I did that because the relationship between admissions and deaths is very close anyway, and there was concern that some deaths were being wrongly attributed to Covid in the early days.

As you can see the relationship on today’s graph of mask wearing versus the seriousness of Covid is remarkably close – the R-squared of the trend line is 0.9648. If you’re not familiar with what R-squared means, 0 would mean no correlation – totally random, but 1 means absolute correlation – all the spots are on a line. R-squared = 0.9648 is pretty good correlation.

This article on University of California San Francisco’s website comments: It’s likely that face masks, by blocking even some of the virus-carrying droplets you inhale, can reduce your risk of falling seriously ill from COVID-19, and quotes Monica Gandhi, MD, an infectious disease specialist at UC San Francisco “The more virus you get into your body, the more sick you are likely to get”, as well as including some comparative examples from cruise ships and stats from some specific industrial settings.

I’m now convinced, from the analysis and small amount of research I’ve carried out, that wearing a mask means that you are much less likely to get admitted to hospital and, in turn, much less likely to die from Covid. And by the way, in case you hadn’t guessed, I’m free for logistics projects at the moment - feel free to contact me!

Kinky Covid Conundrum

3 December 2020

I need to start this piece by saying that I’m no health expert – this analysis was driven purely by my own interest.

I started off wondering about the death rate and, being me, I put some data about cases and deaths from the government’s Covid dashboard onto a scatter graph - I wasn’t necessarily expecting it to be uniform, but I wasn’t expecting such a defined dog leg. The graph I’ve shown here is admissions versus cases, which shares the same kink. Continued below graph...

Aricia Update - Covid - Cases - Admissions - Masks - Statistics

Each spot on the graph represents a day and includes all the cases or admissions for that day and all preceding days. So dates go from left to right, but not in an evenly spaced order - if there is a big increase in cases, there is a big gap left to right, if there is a small increase in cases, there is only a small gap - often so tight that the spots merge into a line.

So either admissions suddenly slowed down compared with the number of cases, or (same thing but in reverse) cases had grown at a faster rate than admissions. I identified 13-19 July as the period where the relationship really changed – you could argue for including a slightly wider period. I started doing all sorts of scatter and time-related graphs examining the relationship between tests and cases, types of test, age of cases… I googled Test & Trace to see when that started, I searched for asymptomatic cases, I wondered about do-not-resuscitate notices and considered care home deaths. Were admissions driving cases in the early days and then cases driving admissions later on? ...the timing didn’t feel right.

But I could see clearly that the admission rate had slowed down, enormously. So I googled for “Is Covid less severe now?” and among other articles found this Bloomberg one which included the following comment and quote:

There is even a hypothesis that public health-measures like mask-wearing and distancing can help decrease the amount of virus people are getting infected with, leading to less severe cases because the body isn’t overwhelmed with a large dose of virus at once. “Even though they’re getting infected with the virus, perhaps they are getting less of a dose of the virus and so they’re just getting less sick from it” commented Leora Horwitz, an associate professor of population health and medicine at New York University’s Grossman School of Medicine who conducted the New York study of Covid-19 hospitalizations.

So I started looking at the timeline in the UK with respect to masks/face coverings. On 11 May, the UK government advises people in England to wear face coverings in enclosed spaces where social distancing is not possible, such as on public transport and in shops. Followed by the British Medical Association urging the UK government on 5 June to extend the rules regarding the wearing of face covering to all situations where social distancing was not possible - reported here in Wikipedia. As with many things, the public was ahead of the government in adopting change and by 6 June I had ordered some masks and I know a close associate in the industry did also, because we could both see which way the wind was blowing and discussed that, even if they didn’t work, we would soon need masks as a passport just to go food shopping etc.

But it wasn’t until 10 July that Johnson was reported as considering making wearing masks compulsory in shops in England, on the day that they become compulsory in Scotland. And 14 July when it was announced that masks would become compulsory in shops and supermarkets in England from 24 July.

Online searches for masks spike in the UK in that week - see screenprint below. 13-19 July was the period that I identified as the point at which the relationship between cases and hospital admissions changed - so, I’m now wearing a mask with considerably increased enthusiasm!

Aricia Update - Google Trends - Covid - Masks - Statistics

Hidden secret: very nearly £100bn online sales pa

20 November 2020

With Lockdown2 in progress in England, Christmas only a month away, ‘Black Friday’ started early and the latest ONS Retail Sales figures out, it’s worth having a look at online / internet / ecommerce sales. Because of the way that ONS report them – as average weekly sales by month, with some months having 4 weeks, others 5, it’s very easy to accidentally hide potentially interesting factoids, and that is the case this month.

If I wanted to manipulate the headlines, I could actually declare that key barrier of £100bn online sales pa in the UK broken, but I’m an honest broker …another confuser is that some years have 52 weeks and some 53 - because the average year (taking leap years into consideration!) is c52.18 weeks, we have to catch up from time to time. NB I’ve brought the figures in the graph back to 52 weeks with a straightforward 52/53 calculation, although you could argue about which week you should be taking off!

You can see the clear impact of Covid on internet sales and also that there is no reason why that record of £100bn shouldn’t be broken when the November figures are out in a month’s time.

Aricia Update - ONS - Retail Sales - Internet Sales Growth - Online - ecommerce - B2C - Retail Statistics

Next day fashion - no such thing as average!

13 November 2020

With Black Friday starting earlier this year because of Lockdown2 and the increased online volumes that Covid has brought, I thought I'd have another look at what five different retailers are charging for next day and when you need to have placed your order. This started as research for a client project back in 2009, looking at the next day offer from different fashion retailers. At that point, next day was at the forefront of offers and, even when I did my first revisit in 2014, only one retailer was offering same day.

The graph below shows the change in order cut-off times and charges to the customer at four points over the past 11 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 2020 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 across the whole period and the last order cut-off, having pushed out to midnight, has now pulled back to 10pm.

Harvey Nichols (red) didn't offer a next day service in 2014 hence the stray dot for 2009, and currently has earliest cut-off and the highest charge. That highest current charge is shared with House of Fraser (green), but which offers a later cut-off.

Jigsaw (purple) has most improved offer both in price and timing since I last did a snapshot. And finally John Lewis Partnership (orange) which has had the most consistent offer over the eleven years.

The average cut off this year is 19.00 and the average cost is £6.98. As so often with fashion, there is no such thing as average, but John Lewis is the closest and offers just better than average on both fronts!

No let up!

23 October 2020

Earlier today the ONS released the latest figures for retail sales and there was no let up in the recent internet sales growth. Even after the Covid-driven spike which peaked in June this year, the growth rate has continued to be phenomenal staying above 50% for the past five months. Online sales, ecommerce, B2C ...whatever you want to call it, hasn’t grown this fast for over 12 years. And now that growth is on top of a much larger base.

What the graph below shows is the year on year growth rate of weekly internet sales. Those sales are reported in twelve periods per year, some of which are four weeks and some five – so it’s weekly sales but with twelve data points on the graph for each year. Hope that makes sense. And worth commenting that the little dip below zero in November 2019 is a bit misleading - it resulted from Black Friday being very late (29 November because of when Thanksgiving occurred in the US) and so falling into the figures for ‘December’ rather than November.

Obviously this has an impact on warehousing space, as reported in Logistics Manager earlier this month, with Knight Frank forecasting an additional requirement, just for the growth in 2020, of 30msqft. And that forecast will have been made before today’s figures for September growth.

Aricia Update - ONS - Retail Sales - Internet Sales Growth - Online - ecommerce - B2C - Retail Statistics

Market elasticity?

21 October 2020

Earlier today the ONS released the latest figures for the SPPI, the Service Producers Price Index. NB The SPPI is like the CPI but for expenditure made on B2B services by government and by businesses*.

Ever since I found out about the SPPI from CILT’s Knowledge Centre many moons ago, I always have a look at how road freight prices (shown on the graph below in bright pink) are tracking in the UK in comparison with the overall index (dark blue). And I always have a look at a couple of the other indices – generally freight related. It’s no surprise to see that Freight Forwarding prices (grey) are rising ahead of general business inflation, reflecting the impact of Covid in the past couple of quarters and with Brexit still to come.

You might not believe this but, funnily enough, I’ve never looked at the price index for consultancy (light blue) before. Currently moving in the opposite direction to the overall index, plainly it’s interesting - both from a general perspective (what we hear about in the news is the NHS paying very high consultancy day rates) and from a professional standpoint, as it doesn’t reflect what I’ve been seeing and what I hear from other established logistics consultants.

But what especially interests me in this set of figures, is that I don’t tend to regard logistics providers, and particularly hauliers, as always being the best at negotiation. But while we all know that diesel prices have been relatively low for the past couple of quarters, haulage rates have apparently continued to rise. Perhaps market elasticity is at work?

Aricia Update - SPPI - ONS - Road Freight - Freight Forwarding - Consulting - 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. So it provides a measure of inflation for the UK service sector with individual price indices, such as Freight Transport by Road, aggregated to create that all-services industry index. It is published by the ONS (Office for National Statistics) and is a quarterly index - it is not seasonally adjusted.

Logistics hangs on in there!

15 October 2020

After a period of growth during 2019, the number of businesses in Transport & Storage has been maintained so far during this Covid crisis period.

Earlier today the ONS* released its latest ‘business demography’ publications and data. The graph below shows the proportion of new businesses being formed as a percentage of businesses that are closing. The pink line is for Transport & Storage businesses and the dark blue line is for businesses across all sectors. The grey line represents equilibrium, with the number of creations equal to the number of closures - if the pink or blue lines dip below this grey line then there were more closures than creations in that quarter, whereas when they are above that line, there are more business births than deaths.

Over the whole period shown, from the start of 2017 through to Q3 2020, there have been an additional 17K Transport & Storage businesses established out of the 145K additional businesses across all sectors.

Aricia Update - Business - Creation - Closure - Transport & Storage - Logistics Statistics

*These figures are from the ONS (Office for National Statistics), and are experimental quarterly statistics on business creations and closures from the IDBR (Inter-Departmental Business Register), which is a comprehensive list of UK businesses used by government for statistical purposes.

Covid again!

29 August 2020

A piece on BBC’s website got me thinking: “Experts suspect a relatively small number of areas in the UK are responsible for an increase in new cases.”. I wondered which is worse – a few places with dense infection, or minor infection distributed in pockets.

The graph below shows a spot for each week (not in date order), with the number of known infected areas on the x-axis and known cases on the y-axis. MSOA stands for Middle Super Output Area - areas the ONS uses. There are 6.7K+ in England. Northampton with its nearly 300 cases was spread over a number of MSOAs, all less than 30 cases. I’ve removed a few zero entries right at the start of the crisis and the unallocated cases, and I’ve picked out the most recent seven days in red.

The thing that really stands out to me is the closeness of the data to the trendline – the R-Squared is 0.9941. If you’re not familiar with what R-squared means, 0 would mean no correlation between cases and areas – totally random, but 1 means absolute correlation – all the spots are on a line. R-squared = 0.9941 is very strong correlation.

It’s as if the figures have been generated with a minor randomiser – if I saw figures like this for warehouse productivity, I’d have trouble believing them.

Aricia Update - Cases - Geography - Covid Statistics

Don't race to the bottom!

12 August 2020

The latest GDP figures were published earlier today along with the ONS ‘Flash productivity’, which does come with a disclaimer – as its name suggests, flash estimates are based on early data and are subject to revision as more accurate data becomes available. But this data is available at industry level, so I thought I’d have a quick look at the impact that the lockdown had had on productivity in Transport & Storage …and ended up going down a rabbit hole!

What you can see on the graph below is productivity for the Whole Economy (blue) and for Transport & Storage (purple). That productivity is £ per hour contribution to GVA - GVA is the value of an industry's outputs less the value of intermediate inputs used in the production process, and is used as a proxy for GDP – it is nothing to do with what individuals are paid.

I’ve also added some trend lines – you can see that things were rising reasonably predictably from 1997 through to the end of 2007, then the recession hit, then things started to pick up again …for the whole economy they picked up and continued to rise reasonably predictably (albeit at a reduced rate of increase – hence economists interest in the productivity puzzle), before the Covid cliff edge. But after its recovery from the Great Recession, Transport & Storage peaked at the end of 2014 and then started a downward course – a long time before the word Covid had been invented. Continued below the graph...

Aricia Update - Transport & Storage - Productivity - Output - Hours worked - GVA - Logistics Statistics

Pretty much as an aside, although it’s why I looked to start with, in 2020 Q2 Transport & Storage’s contribution to GVA was 67% of what it was in 2019 Q2, whereas the economy as a whole was less affected at 78%. One section of the economy improved in that comparison, Manufacturing of Chemicals & Pharmaceutical Products and the worst affected was Hotels & Catering, which only managed 12% of its 2019 Q2 level. In terms of hours worked in 2020 Q2, Transport & Storage worked 77% of the hours of 2019 Q2.

Back to my rabbit hole! Now Transport & Storage has a mix of various modes and includes public transport, transport by pipeline, bulk storage as well as road haulage, post/courier and warehousing. The air and sea elements can be put to one side as they are relatively small. Land transport has been fairly predictable in its productivity rise, but both Post/Courier and Warehousing have been more erratic, and of those warehousing is the larger by about 2.5 times.

Despite all the extra value-added work that’s come along with ecommerce, competition between industry participants is eroding both individual companies' profitability and our sector's contribution to the nation's productivity. Putting Covid to one side (and despite all that ecom), the Transport & Storage sector only represented 4.2% of the whole economy’s GVA in 2019 Q2, compared with 4.9% back in 2007 Q2. Whereas, hours worked in Transport & Storage have *risen* from 5.2% of all hours worked in 2007 Q2 to 5.5% in 2019 Q2.

If we go back to the graph, we have that decline from the end of 2014 in Transport & Storage that is not reflected in the economy as a whole. I recalled the UK Logistics Confidence Index back in 2015 commissioned by Barclays and Moore Stephens: “For the first time …maintaining their existing customer base is now the top focus for logistics companies …for over half (57%) of operators, their main source of new business over the past six months has come from ‘switchers’ from other logistics service providers. Barely one in ten said that their main source of new business came from customers renewing existing contracts.”.

We must stop fighting ourselves and stop that race to the bottom!

Is Johnson right to panic?

4 August 2020

I know that the graph below is a little difficult to understand quickly, so I’m going to take you on a journey and tell you why I was looking at this to start with.

Quite rightly, there’s been lots in the press about the sheer number of deaths attributed to COVID-19. I’ve also seen a lot about excess deaths and deaths as a proportion of the population as a whole, but what I’ve seen little about is deaths as a proportion of cases in the UK - if I catch COVID-19 what is the likelihood of dying?

There is a spread of figures, but only yesterday (=3 August 2020) there was a piece on the BBC’s website with two figures attributed to John Hopkins University “Globally, more than 18 million Covid-19 infections have been recorded. The death toll stands at 689,000…”. I’m going to use those for the purposes of this piece – the death rate globally is 3.8%. Whereas if I look at the UK figures, on the government dashboard*, of 305,623 as at 3 August and 46,210 deaths, that gives a figure of just over 15%.

*Government dashboard: Try or - not sure of link as they are changing the reporting again on the day I write this piece.

Now as someone who works with data, I’m the first to ask the question as to what factors might affect that, and there are some obvious ones:

  • We may genuinely have a much higher death rate – we know the UK didn’t deal with the care homes issue at all well
  • Different reporting of deaths – deaths could be wrongly attributed COVID-19 – people have died WITH and not because of COVID-19
  • There are many more cases than we know about officially – again we know that we weren’t carrying out testing as early or to the same extent as other countries, so that is a strong contender
  • Different countries are at different stages of the pandemic – we are ahead of some other countries in having had a first spike
  • There could be manipulation of the figures, but it’s extremely unlikely that you’d fix things to make the UK look 4x as bad as the rest of the world
  • Or it could be a combination of a number of the above

Thinking about these various reasons, I wondered what the variation in the UK death rate had been during different phases of that first spike and, being me, popped the data on a graph – Cases versus Deaths. I used a 7-day Moving Average for each, to eliminate the weekend effect of low reporting followed by the inevitable catch-up early the following week. That’s the only manipulation of the data that I have carried out - you could argue for an offset of a few days (c3) for the death data, but I haven’t done that.

I did a straightforward scatter graph of all the data from February to now and put in the linear trend line - the R-squared is 0.9362. For those of you that aren’t familiar with what R-squared means, 0 would mean no correlation between cases and deaths – totally random, but 1 means absolute correlation – all the spots are on a line. R-squared = 0.9362 is strong correlation - the correlation was sufficiently strong that with just a scatter graph I couldn’t get my head round what was happening when.

So I created this graph, which does require some explaining! Each spot on this graph is a point in time and joined in sequential order by date. So, starting with the green spot right down in the bottom left hand corner, you can follow the UK course from 6 February (the moving averages for 31 Jan- 6 Feb), quickly rising (green) over c10 weeks to its peak (top right) in mid-April and then follow the journey back down (through yellow and orange) to the start of June, which is when testing started to get real headroom in its capacity**, to 8 July after which the cases started rising again to where they were on 3 August (red). I’ve put in some key dates and added some arrows to try to help you follow the graph. I’ve also included the trend line as the grey dotted line. Continued below graph...

Aricia Update - COVID-19 - Cases - Deaths - Statistics

**The start of June is the point where we might have expected the number of cases to increase with additional testing – not an increase per se, but an increase in the number of cases we were aware of, reducing that death rate, but that doesn’t appear to happen.

The moving average of cases is now just slightly ahead of where they were on 23 March as lockdown was declared. Anyone who thinks that we are now more on top of things than we were then needs to be aware that the area of England with the most cases (out of 6792 areas) is ‘xxxxxxxxx’ (=we don’t know where), with more than 2.5 times the number of cases for the largest known area.

So my original question remains unanswered – why is the UK death rate so high? It’s not entirely down to the care home issue. Based on the latest ONS figures, cumulatively just under 30% deaths up to 24 July were in care homes. Even if you said that all of those deaths hadn’t happened, that still leaves the UK having 2.7 times the global average death rate.

And it looks as if things may take off again as COVID-19 does a U-turn, possibly as a result of the relaxation measures. What seems like an extreme reaction, such as waiting until people have gone on holiday to Spain before announcing reintroduction of quarantine, may not be extreme enough.

When I have no paid project work to do, I still find myself looking at data and investigating the patterns. A great compliment someone in the industry paid me was to describe me as intellectually curious! If I can put that to good use for you, just message me!

Amazon property - where next?

30 July 2020

Amazon's logistics property portfolio in the UK continues to rise and rise.

MWPVL have recently updated its amazing resource - a listing of all the Amazon properties in the world! Most of the Amazon data has been sourced from MWPVL's website, but then I've also done some Googling of my own, updating some figures, adding in new ones... 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 you count square footage for different floors for an exercise like this? I've tried not to, but Amazon does love to rentalise its mezzanines!

The impact of Covid has been to increase online sales in the UK to 31.2% of retail sales in June, and if you want an up to date picture of inside one of its mega-sheds, you could do far worse than read this great piece about Tilbury, written just a couple of days ago, on Essex Live.

So far, so boring - the graph looks pretty much like last year, with just another year added. So, where next? Both a geographic and business question - if you currently sell on Amazon using FBA, there is extensive advice on the implications of Brexit and stockholding locations. But what will be the combination of Covid and Brexit be on Amazon's UK property requirements going forward? Will it continue its seemingly inexorable rise, increase the gradient due to Covid or flatten off as stock moves to the mainland?

Aricia Update - Amazon property - Fulfilment centres - Delivery Stations - Fresh - Prime - ecommerce Statistics

Time to become a Mechatroniker!

24 July 2020

You’ll have seen items in the press already about how retail sales have bounced back, and if you just looked at the overall retail sales figures from the ONS (Office for National Statistics) out today, you’d actually conclude that they were boring. If you put a trend line on the graph below, you wouldn’t be at all surprised where it ended up.

But the mix change really has been something else - internet sales have gone from representing 18.3% of sales in June 2019 to 31.2% this year. We understand from a Prologis report back in 2016 that a DC for online retail requires c3 times as much space as for high street retail. So the Savills 'Big Shed Briefing' from earlier this month reporting “strongest H1 performance ever recorded” as far as take-up is concerned, hardly comes as a surprise, as that change of mix translates into nearly 19% extra footage required, all things remaining equal.

Continued below graph...

Aricia Update - Retail Sales - Internet Sales - ecommerce Statistics

Now all things are not equal – as you can see, retail sales have continued to rise slightly (June on June), although some of that will have been pent-up demand and the mix of merchandise has also changed.

But that projected increase in logistics space that I’ve just made also assumes that we carry on doing things in the same sort of ways as we have been up to now. And with the same sort of increase in staffing. In the past I’ve carried out a couple of projects looking at congestion in fulfilment and sort centres – at what point does the operation start becoming less productive because of the number of people, but now there’s social distancing to consider as well. So the future (it won’t surprise you) is automation.

I was sent a copy of STIQ’s Goods to Person Solutions 2020 recently (thank you Stefan Weinstein), and one of the many things it reports on (it is absolutely dense with information!) is a snapshot of the number of job openings available in each company in the warehouse automation industry.

This is not an industry that tends to be headquartered in the UK. We’re always talking about education in STEM subjects, but it’s not an area we seem to be able to ‘sell’ to young people. A while back, I was struck by an email I got from a German friend, who told me that one of her sons was about to start his first job, as a Mechatroniker.

I wonder how many UK parents (and careers advisors) know what that word means without a bit of googling? But if you put the number of jobs that require that skill set on a graph, I bet it’s going up even faster than internet sales!

From one extreme to the other!

15 July 2020

I usually do an update on the SPPI* when the ONS (Office for National Statistics) publishes its quarterly figures, but I didn’t when the Q1 figures came out in April - I didn’t spot anything that looked that interesting and didn’t know where things were going as we’d only recently entered lockdown ...but when I looked this time, Wow!

Back in February, Which had written about the impact of Royal Mail price rises to consumers, which coincidentally were implemented the day we all went into lockdown. The SPPI is about the rates charged by businesses to other businesses and government departments, and the SPPI element includes Parcelforce, but plainly the steep rise on this element of expenditure has been the same for businesses as well as individual consumers.

What you’re seeing on the graph is the index for All Services (in dark blue on the graph), and the indices for Freight Transport by Road (pink), National Post/Parcelforce (green) and Courier Services (orange). See below the graph for further commentary on road freight...

Aricia Update - SPPI - Road Freight - post & Parcels - Insolvencies - Logistics Statistics

Post and parcels to one side, while road freight rates did do a little dip in Q3 2016, this is the first time for the past four years that it has gone down, albeit again just a little. But it made me think to look at the monthly insolvency figures that came out yesterday and, I’m guessing, as a result of government support for businesses during the Covid-19 crisis, the insolvency rate in England & Wales in June 2020 was only 50% that of a year ago.

Transport & Storage as a whole (so including all modes and passenger transport), while slightly up in March, was down against a year ago in April and May, and in June at 48% - not dissimilar to the general rate. One issue in looking at these figures is that one company counts as one, so if a mega-company goes under, it may not have a large impact on these figures.

Freight transport by road and removal services, which will include a lot of SMEs, had an uplifted figure in May at 120%, but in June was only 36% of the number of insolvencies of the previous year. For the whole of the Mar-June period, there were less insolvencies in this element of the industry this year in England & Wales than for the same period in 2019.

So if there is a hint of the race to the bottom in rates, it’s not coming out in insolvencies yet.

*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. So it provides a measure of inflation for the UK service sector with individual price indices, such as Freight Transport by Road, aggregated to create that all-services industry index. It is published by the ONS (Office for National Statistics) and is a quarterly index - it is not seasonally adjusted.

That little thing called eCommerce

29 June 2020

Last month, Moderns published its latest Top 20 Materials Handling Systems Suppliers with revenue for 2019, something I've been monitoring for a number of years. This update fits well alongside a recent eCommerce Linkedin post from Lynn Parnell and one including a great graph on internet sales from Adam Fox, and also the post earlier today on logistics property growth from Kevin Mofid.

I think you'll agree that there's something going on as well as mergers and inflation, that little thing called ecommerce and its need for materials handling including automation!

Aricia Update - Materials Handling - Automation - Ecommerce - Logistics Statistics

Need a job? Think Health or Retail?

16 June 2020

With headlines today like this one on the BBC: "More than 600,000 UK workers lose their jobs amid lockdown", people will be needing to apply for jobs, but at the same time vacancies are down to 2012 levels.

I did an update on this only a month ago, but thought I'd visit the subject again, as the drops that we are seeing now are more extreme. Earlier today the ONS (Office for National Statistics) published fresh figures, with the latest being for Mar-May 2020. All sectors have seen a reduction in vacancies over the past year - anything from about 15% to nearly three quarters.

Human health & social work still has a high level of vacancies, although not as many as a year ago. And despite the state of the high street and the impact of Covid, Retail still has a high number of vacancies at not far off 10% of those available in total - indeed these two sectors combined represent a third of all the vacancies currently available.

There are now about 476K vacancies UK wide, which compares with 841K a year ago - this latter figure not far off the highest number of vacancies in the figures available since 2001. Meanwhile, there are just 18K vacancies in Transport & Storage, down from 41K a year ago, and a max of 42K, and the number of vacancies per 100 employees is only three quarters of the UK average.

Aricia Update - Vacancies - Transport & Storage - Retail - Health - Logistics & Retail Statistics

NB Vacancies are reported by rolling quarter and are seasonally adjusted. The graph above shows how the number of vacancies has changed since the same period in 2007. It’s important to note that you can’t equate the Transport & Storage sector directly to Logistics. The former will include passenger transport, but won’t include logistics staff employed by, for example, retail companies.

Whopping increase!

22 May 2020

While in many ways no surprise, the ONS (Office for National Statistics) figures published earlier today do demonstrate just what an increase some elements of business have had to accommodate, with weekly internet sales up by a third on April last year and representing 30% of total retail sales for the first time. April is the first complete post-lockdown month and, although Easter can be a confuser in analysing Spring, it fell in April in both cases.

Non-store retailing, or Pure Play, still by far the largest proportion, up 19% against 2019 (on my graph below, purple is April 2019 sales in £m with red representing the additional sales for April 2020). Food and household goods combined up a whopping 91% - household goods stores had the larger increase, more than doubling, but 'predominantly food stores' is the larger element, up 84%. I've also combined non-specialised and other stores, both showing healthy increases.

Clothing is the only element on my graph that needs more explaining - the April 2019 sales go right to the top of that bar, including the purple border, with the red hashed area representing the decline, the drop back, to April 2020 sales. Poor old clothing, the only category showing a decline - of more than 20%.

So no real surprise that the news is about Marks & Spencer taking £1bn worth of actions to manage cash.

Aricia Update - Internet Sales - Food - Clothing - ONS - Retail Statistics

Vacancies in Logistics*

19 May 2020

Earlier today the ONS (Office for National Statistics) published various labour market measures including Vacancies by Industry, with the latest figures being for Feb-Apr 2020 – vacancies are reported by rolling quarter and are seasonally adjusted. The graph below shows how the number of vacancies has changed since the same period in 2007. You can see the various lines rise at the start of 2008 before, in most cases, plunging in 2009.

At the more recent end of the graph, the impact of Coronavirus can be seen. Three of the lines - All vacancies (purple line), Transport & Storage (blue) and Accommodation & Food Service (yellow - included as this sector showed the sharpest decline) - all end up with almost exactly the same level of vacancies as in 2007. Where those lines will go next is anybody’s guess because the full impact of lockdown isn't yet reflected in the latest rolling period.

Retail vacancies (orange line at the bottom of the graph) never really rose above pre-recession levels. While, in contrast, Health & Social Work (green) ends up with twice the number of vacancies as 2007, although it can be clearly seen that this isn’t driven by Coronavirus, but over a period of years, presumably by the needs of an increasingly aged population and, possibly, the impact of Brexit on non-UK staff.

*It’s important to note that you can’t equate the Transport & Storage sector directly to Logistics. The former will include passenger transport, but won’t include logistics staff employed by, for example, retail companies. But this will be a good indicator.

Aricia Update - Logistics & Retail Vacancies - Logistics & Retail Statistics

Deciding to reduce lockdown

27 April 2020

Everyone who knows me knows that I like analysis and mapping, so with no paid projects currently, I’ve been monitoring the daily Coronavirus figures. While I don’t want to deride the efforts being put in by the person who is collating this data, I feel for whoever has to make the decision to start stepping back from lockdown. Because the data is crap (a technical term). It’s been widely reported that the figure for deaths only includes about half the real numbers. Cases include only those which are lab-confirmed. And it’s not helped by PHE (Public Health England) keeps changing the ways in which the figures are reported - the last change was on 21 April, so any data declared before a week ago is not directly comparable.

And I’ve seen no information on the geography of testing. Different areas of the country are progressing in different ways. From a selfish point of view, when lockdown is eventually relaxed, will I be at more risk visiting some of the London boroughs with high number of cases, but low growth, or somewhere apparently more benign with a low number of cases, but a higher rate of growth?

I’ve been monitoring cases rather than deaths, mainly because it’s also been possible to map the cases at UTLA (Upper Tier Local Authority) level, whereas the deaths are presented by PHE in a different manner. But, because of the timelag in data becoming stable and all confirmed cases being reported, every day it looks like we’ve nearly got to a position where England has no new cases, and then the next day the same, and then the next day… Meanwhile the data is backfilling as more results come in, meaning that wasn’t 'nearly no new cases' at all (see my description of what the graph is showing in the next couple of paragraphs). The timelag means that it’s like trying to make a decision with your hands tied behind your back. I didn’t see 100K cases in England reported, but that’s probably because the backfilling of data meant that by the time we knew it happened, it had happened three days ago and I’d be the first to recognise that doesn’t make the greatest headline.

Here’s how the graph is compiled:
• Because of the way in which the results are declared, this is for England, not the whole UK
• It is showing the daily rate of change of lab-confirmed cases (shown as %), with the Y-Axis showing that rate of change as a percentage
• Along the X-Axis is the date that the data belongs to – what I’ve referred to as the datestamp
• And the different coloured traces are for the daily announcements – so the lighter blue line is the data as declared on 21 April, orange as declared on 22 April and so on

So, what is the graph actually showing? You can see that on 21 April, it looked as if the daily rate of change of cases on 20 April (the blue square) was nearly zero (0.1% to be more precise). But, follow the orange arrow, by 22 April, it looked as if the daily rate of change of cases on 20 April was 1.2% - we’re now looking at the orange square. By 25 April (darker blue trace) it now looked as if the daily rate of change on April 20 was 3.1% (darker blue square). I’ve not put a square on the green trace, the most recent, as we now seem to have most data for 20 April. And you can see that the next day, one might feel similarly encouraged by a low rate of change, only for it to move up the graph in the same way.

Anyway, waiting for it to get to zero and stay there is not going to happen anytime soon. As testing of essential workers and others increases, so will new cases, which is a good thing as they will be cases no-one was (officially) aware of before. As the testing regime changes, at some point including random testing, that will (hopefully) reduce the proportion of tests turning into cases. And as the tests themselves change, both in type and reliability, that will also change the results.

So, I genuinely feel for whoever has to make the decision to start stepping back from lockdown.

Aricia Update - Coronavirus - lockdown - PHE - 270420

Coronavirus Timeline

24 April 2020

This update is a link through to a document I've put together. It's very much about what the public knew about Coronavirus, when they knew it, how that affected what they did, and how that went on to affect retail and logistics. My objective in putting this together, is to help understand client data going forward – what happened when. I hope you find it useful: Coronavirus Timeline

Watford Observer

Gender Pay Gap 2020

6 April 2020

It feels funny giving an opinion on things like the gender pay gap right now! And while I'd be the last to suggest that this is a high priority with everything else that's going on, I do think it would have been preferable for the government to have extended the submission deadline rather than say that there is no expectation on employers to report their data.

So, at today's date, the first working day after the formal deadline for a process that began a couple of years ago, less than half of all companies and organisations required to make a submission have done. So there's little point in looking at the fine detail and making year on year comparisons. Only 36% of logistics companies which previously made a submission have done so, but you'll probably be surprised to hear me say this - just a personal view, I don't think it matters a huge amount. Do read on!

The calculations required to be reported by the government, while hugely useful in that they create a focus and promote discussion, don’t work particular well for logistics. Our pay gap tends not to look too bad – there are comparatively few women in the sector, but the sheer number of ‘active’ workers that we have means that the median man and the median woman are quite likely to be in similar operational roles with specified hourly rates that are legally not allowed to differ – for example, warehouseman versus warehousewoman.

With all the reading and analysis I’ve done in this area, I’ve become more and more convinced that logistics needs to recognise and rectify its 'leadership diversity deficit' – not because it’s nice, not because it’s fair, but because diversity is provably good for business. I’ve also become more and more convinced that the leadership diversity deficit, more than the gender pay gap per se, is the real issue for our sector.

Looking at the quartile calculations, whereas over 39% of companies have more than 50% females in the top quartile, that only includes one 'logistics' company, a wholesaler - I'm not saying that more than 50% of directors being female is good, I'm just saying that logistics is out of step. One reason is that the quartile calculations required by the government are not nuanced enough for logistics. Our pyramid structures means that there will probably be hourly paid staff, for instance drivers, in the top quartile - not because they are so well paid, but again because of the size of the largely male ‘doing’ bit of the employee base. Have a look at the graphic below, and you'll see what I mean. So, examining what is happening at director level and in senior management would be more useful...

As usual, at the end of last year, the Motor Transport Top 100 came out, revealing an average pre-tax profit of just 2.2% across the top 100 road freight companies. The Knowledge Centre at CILT’s HO in Corby has access to the FAME database and 8% is more of a norm for other sectors. Meanwhile, the FAME database also includes data on the gender of directors - for Transport the proportion of female directors was 20%, while for non-logistics sectors the average was 31%. I'd be the first to say that these figures are not all directly comparable, but we are a low margin sector and have low numbers of female executives - is it possible that the two go together?

Aricia Update - Gender Pay Gap - Leadership Diversity Deficit

No driver shortage at the moment

4 April 2020

Well, this is a different sort of an update for the different sort of time we live in. No stats or graph, more of a blog, but very relevant to the logistics industry.

Coronavirus gets going and everyone is panic buying – the grown-ups make a fuss about people shopping, telling people it’s unnecessary. But the concept of the need to feed the nation is born, with drivers hours regs relaxed to accommodate. My husband who has an up to date CE licence and medical, but let his DCPC expire in September, feels that he ought to be available to help this push to get food to where it needs to be. So he books a DCPC course starting Monday 23 March.

We get up two mornings running at 4.30am for him to be early for a 7.30 start on the other side of the Cotswolds. First day (long story – we’re not stupid and we did our best on Saturday on the web and by phone), he doesn’t find it until c8am and is told that he and another latecomer can’t join the course. So he comes home. That evening Johnson makes an announcement, but no-one from the training rings to say it’s not going ahead, so we have another 4.30am get up – this time there are three of them hanging around in the street – the trainer never appears, doesn’t ring...

At this point we’re £450 down and the company that he booked the course through are refusing to refund his money. After a bit of argy bargy, they do get him booked on the first-ever internet-based driver CPC course, and so we spent the whole of last week with our home office given up to all-day all-week Zoom-based training.

We’d agreed that because of my husband’s age (he’s not 'old', but if he catches Coronavirus, they won’t consider reviving him a high priority on the basis of his birth certificate!), he was only going to drive if it involved foods, pharmaceuticals etc – things that were really necessary.

So what’s the point of telling you this – well, there’s certainly no driver shortage at the moment. There’s certainly no excuse for further relaxation of the drivers hours regs. He rang one of the local agencies during the week – there’s no driving work of any kind. End of.

If you can't monitor it, you can't manage it

28 March 2020

That's what we always say in logistics and it applies to Coronavirus, this 'Padrón pepper' of a disease that hardly affects some while giving others the most severe symptoms.

Lots of provisos because a) the map below is just a snapshot of data at 27 March 2020 with this piece written on 28 March 2020 and b) because the data does have shortcomings: even after today's news about more testing of key workers, there has been no recent targeted testing of potential cases (unless you're a potential king or visit No 10) and no random testing of the population at large (or rather under lockdown).

I've been looking at the data published on the government website for the past few days . It is based on UTLAs (Upper Tier Local Authorities), which have varying population sizes (coming on x40 difference in size), which make the size of the spots difficult to interpret. Also, it's just one day's data, so you can't see how it's changing. So I've been mapping it myself using two measures: number of cases per 100K population (the size of the spots on my map) and the percentage change in the past 48 hours (the colour of the spots - grey for below average through to deep blue for above average) - I've gone for 48 hours to be as up to date as possible, but to smooth any little distracting wobbles. The current average rate of change for England is 53% increase (corrected) in cases in 48 hours.

More provisos. This is just England as this is the PHE (Public Health England) data on the government website. The date of the data is deduced, as the data downloads don't include a date. The data is based on cases reported to PHE. The total for England may not match this regional data as some cases are awaiting geographical information. Cases include people who are recovered, but this is less than 1% at the time of writing. By the way, I've seen discussion about how few people seem to recover, but Hubei, the best indicator because of how long ago it got going and the measures then taken to stop its spread, had a death rate of c5% but with most other cases now declared as recovered.

Now I've fulfilled obligations to existing clients, I'd like to log that I'm available and well-used to carrying out remote projects including non-logistics assignments that share the overlap of location and data analysis - many of the techniques I use for strategic work can be just as useful for tactical replanning.

Keep safe, Kirsten

Aricia Update - Map - Coronavirus Statistics

Coronavirus Dashboard

23 March 2020

I've replaced the dashboard link I included before with this one Public Health England Coronavirus Dashboard - DON'T be put off by the date on the front page as it is kept up to date and DO zoom into the map to make it meaningful.

Aricia - Update

HS2, Northern Powerhouse, Maptitude demographic data & heatmaps

24 January 2020

Among other analytic and visualisation tools, I use Maptitude - mapping/GIS software. I post Maptitude tips on our website and tweet them - always aiming to have three across a variety of features. Today I thought I'd share the tweet from this week with Linkedin. It wasn't a new tip but the result of using a current tip (at the time of writing!): how to turn area census-type data into points, so you can do a heatmap.

The heatmap shows 'overheated' London. But also, given discussion about HS2, population density in Midlands and NorthernPowerhouse - demonstrating the importance of the E-W corridor as well as N-S.

Aricia Update - HS2 - Northern Powerhouse - Maptitude - Mapping - GIS - demographics - heatmap

Haulage operators at risk?

15 January 2020

Earlier today the ONS (Office for National Statistics) released the latest SPPI figures* for Q4 and 2019 as a whole. The graph below shows the SPPI index for Freight Transport by Road (bright pink) and an index for Road Freight Costs (Orange) derived from Motor Transport Cost Tables. The indices are shown from 2015 onwards, with both brought back to a base of 100 in 2015 for easy comparison.

As anyone who has reviewed the recent Motor Transport Top 100 figures will be aware, margins in the industry remain precariously low, having reduced over the past few years. As can be seen from the graph, there is now a wide gap between rates and costs compared with 2015, and I think that many people would accept that the haulage business wasn’t exactly lucrative then!

Just the other day, I heard someone say that everyone wants everything at a backload rate these days - although rates have started to rise over the past few years, they are not rising fast enough, potentially putting more than just Eddie Stobart at risk.

Aricia Update - SPPI - Road Freight - ONS - Cost tables - Motor Transport - 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 an all-services industry index.

No Black Friday!

20 December 2019

Yesterday the ONS (Office for National Statistics) published the Retail Sales figures for November. The data was collected and published to the normal timetable, which unfortunately meant that November didn’t include Black Friday – the ONS months are a combination of 4 and 5 week periods, and with Thanksgiving, and thus Black Friday, falling so late in the month, that meant that it will fall in the period for December.

In addition, the data for internet sales that is included in the retail sales data is not seasonally adjusted. What these two factors mean is that “for the first time since records began” annual internet sales appear to have dropped very slightly (see graph below) – and we’ll have to wait until January to find out whether that’s the case or not. This is the first time that ONS has had to deal with this particular issue as the last time that Black Friday fell so late was also its debut in the UK (2013) with only a couple of companies participating, scarcely make a blip in statistics.

Although the ONS report comments on Black Friday and includes some figures that are seasonally adjusted, it doesn’t mention any potential impact of the lead up to the election. Is it perhaps continuing with a self-imposed purdah?

In the meantime, my very best wishes to all for Christmas and 2020!

Aricia Update - Internet Sales - Black Friday - ONS - Retail Statistics

Is the crisis back to normal?

18 November 2019

So, the news is that the staff shortage in Transport & Storage apparently returns to being no worse than normal, according to the latest figures released by the ONS (Office for National Statistics) last week.

The graph below shows the number of vacancies, in thousands, for the whole economy (blue line, left hand axis) versus the Transport & Storage sector (red line, right hand axis) for the period August to October each year. It can be seen that the general pattern has been very similar since 2009, apart from a sudden increase last year. But it then appears to have returned to normal.

Now you can’t equate the Transport & Storage sector directly to Logistics. The former will include passenger transport, but won’t include logistics staff employed by, for example, retail companies. The T&S figure for employees is 1.6m July-Sept and also for Oct to Dec last year (these figures come from an ONS data set covering a different timeframe for reporting to vacancies). In a report published about a year ago, the FTA (Freight Transport Association) estimated that there are 1.8m people employed in logistics companies and 2.7m logistics employees in total.

But you could argue that Transport & Storage is better off generally than the rest of the economy. The vacancy ratio per 100 employee jobs has actually been the same or less in Transport & Storage than for the rest of the economy for all of this period, and is now 2.2 for Transport & Storage compared with 2.8 for the UK as a whole. The question is, does it feel like that on the ground?

Aricia Update - Vacancies - Transport - Storage - FTA - ONS - Logistics Statistics

Transport as a leading indicator?*

3 October 2019

I've always been interested in relationships ...and, no, before you ask, not the Boris & Jennifer type! Relationships between different data sets. I'm told that this is one of the most interesting updates I've done, but also at the same time, one of the most complicated. Perhaps the two go together?

The first thing you'll be wondering is "Why is there a loop in that graph?". What you're seeing is a spot for each quarter from Q4 1994 through to Q2 2019, with GDP on the X Axis and Light Commercial Vehicle mileage on the Y Axis. The 'loop' is the 2008/9 recession, with the spots rising until Q1 2008, GDP then reducing while van mileage remains pretty constant until Q3 2009 when mileage reduces slightly while GDP begins to increase again, forming that anti-clockwise loop.

This GDP data has been released by the ONS in the last couple of days, and the mileage data is from the latest DfT** release in the latter half of September. I'm not usually interested in old info, but the reason I've gone back to 1994 (the oldest mileage data in that release) is that it demonstrates how straightforward the relationship normally is.

What really attracted my attention is the 'hook' that is forming at the top of the graph (as near to now as this data allows us to get). It's clockwise (so moving in the opposite direction) and obviously has a different driver to the 2008/9 recession.

I'm very interested in what other industry contacts think is causing this, but to me it looks as if there is currently the start of an economic downturn almost being driven by a reduction in van mileage, rather than vice versa. Polish drivers going back to mainland Europe? Stockpiling followed by the start of a bullwhip effect?*** Whatever the reason and, although I know some readers will find the analysis obscure, I believe what it shows to be of national importance.

Aricia Update - GDP - LCV miles - DfT - ONS - recession

The GDP data is seasonally adjusted and the mileage data is rolling annual mileage, so comparable. I've gone for LCV mileage rather than HGV, as a) it's about 3x higher and, crucially, b) it follows GDP more closely (LCV mileage against GDP has an R-Squared in Excel of 0.9708, even with the loop etc - ie near perfect correlation. HGV mileage shows virtually no correlation with GDP, with R-Sq = 0.0032). Although it's worth noting that HGV mileage has also fallen recently after sustained increase since 2013.

NB If you look at £GDP/LCV mile over the whole period there is a general trend down from over £11.50 to less than £10.50.

Three notes added 7 October:

* I'm extremely grateful to Richard Simpson of Transport Operator for his input on this, making me realise I should probably have given the piece a different title!

Aricia Update - LCV - Mileage - DfT

** And here is a link to the actual DfT data (I used table TRA2501), as I realise you couldn't access it from the pdf link.

*** And finally (I think) thank you to Christopher Moir for this contribution - so I was totally wrong with my potential reasons!

Aricia Update - LCV - Mileage - DfT

Commute time versus gender

5 September 2019

The link between the time people are willing to travel to work and whether that affects what they earn, and particularly the impact on women’s earning power, is something that has intrigued me ever since I realised that, whenever I was at Beaconsfield services at c7am, I was the only female, apart from one or two serving staff behind the counters.

Yesterday the ONS (Office for National Statistics) published statistics about the link between age, gender, commute time and pay. The graph below shows the link – how both men’s and women’s willingness to commute and their hourly pay continues to grow with age …and then both diminish. But with the age at which women’s commute time and pay start to contract is much earlier than for men. The ONS is careful not to make assumptions, but the link to having children is clear.

One of the things that I was really struck by in preparing the content for my presentation to CILT’s International Centenary Convention this year was the link between diverse leadership teams, decision-making quality and companies’ financial well-being. And this data shows the importance of companies considering how they retain senior women who have families. This is particularly relevant to the logistics industry which has relatively few senior women and low margins.

Aricia Update - Gender - Commuting - Pay - Leadership - ONS

Amazon & Internet Sales - growing apace

15 August 2019

Earlier today the ONS (Office for National Statistics) published the latest retail sales figures, including internet sales for the UK. I was making a forecast of where internet sales for the whole of the UK might end up for 2019 (no Brexit impact factored in!), and thought I'd put it on a graph including Amazon's logistics property portfolio for the UK as MWPVL have recently updated its amazing resource - a listing of all the Amazon properties in the world!

As before, 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 Amazon data has been sourced from 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 - 2020 hasn't happened yet and internet shopping just carries on and up!

Aricia Update - Amazon - MWPVL - Internet Sales - ONS - logistics statistics - retail statistics

NB I need to say that it's my choice as to the scale on the right hand side of the graph, and I have deliberately scaled it to see how closely sales increases for the whole UK have been mirrored by the square footage growth of Amazon's Fulfilment Centres. The ONS only started collecting internet sales from November 2006, so 2007 is the first full year for which we have official figures.

Is the genie out of the bottle?

19 July 2019

The news from the ONS (Office for National Statistics) earlier this week was that the overall Transportation and storage index provided the largest upward contribution to the annual rate for the SPPI* for Q2 2019. The graph below shows the SPPI for All Services at Gross Sector level (Dark Blue - general inflation for business services) and the indices for Freight Transport by Road (bright pink), Storage and Warehousing (green), Cargo Handling (lilac) and Freight Forwarding (grey).

I usually look at a five year period, but the timing of this release of statistics made it seem appropriate to look at the three years immediately before and after the Brexit vote, and so I’ve included six years on this occasion, with the dark grey vertical line representing the timing of the Brexit vote exactly halfway through that period.

Not all the elements that make up the overall transport and storage index follow the patterns shown on the graph – some have been quite flat over the six years, others have gone up and up, and there are also passenger transport elements as well as logistics. What I’ve chosen here are some key logistics indexes that had relatively flat inflation prior to the Brexit vote, followed by increased inflation afterwards. NB Freight forwarding is often said to be countercyclical.

These indices will be affected by all sorts of things including stockpiling and other contingency measures, and increased cost of attracting staff, with the effect of exchange rates on the worth of sterling and people just not feeling like the UK is so appealing as somewhere to work and live, being part of the mix. But is the inflation genie now out of the bottle? Food for thought!

Aricia Update - ONS - SPPI - transport - storage - road freight - brexit - 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 an all-services industry index. The ONS says that the services sector is estimated to account for around 80% of the UK economy based on its weight in gross domestic product (GDP), and that the SPPI is estimated to represent 59% of the total services sector.

More on the Gender Gap Index

25 June 2019

There was interest in a number of areas that I covered in my presentation to CILT’s International Centenary Convention on the gender pay & leadership gaps and the impact of gender & diversity on business financials, but an area where I was asked a specific question was around the World Economic Forum’s Gender Gap Index.

I used a map (see previous update below) in the presentation that I’d created using Maptitude the GIS software I more usually use for UK logistics analysis, which showed the top level index country by country around the world for 2018 – the top level index is a measure of general equality made up from four constituent parts: economic participation, educational attainment, health & survival, and political empowerment. It was about how things looked across the four sub-indices that I was asked about, so I’ve popped them onto these maps. Continued below maps...

Aricia Update - CILT - WEF - Gender Gap - Index - Maptitude - gender statistics

Each of these four constituent parts is itself composed of multiple statistics, and the results are sometimes widely spread, sometimes very closely packed. So each of the maps has its own legend which shows which countries have the highest index (the darker blue), and therefore the most equality, and which have the least (red). I chose the settings in Maptitude for 'equal size intervals' and for a split of five groupings, but Maptitude itself analyses the data and has selected the particular to-from brackets (in three cases with only four groupings because of the profile of the data). I could customise this further if I was looking for specifics.

In the report that I’ve linked to in the first paragraph, there is a page for each country that is included, with the statistics for that country and showing the ranking for the various statistics – remember in looking at these that they are about the different experiences of men and women resulting in the gender gap, not about how the country is performing per se. There is also a data explorer with two additional views as well as a map: listing by rank and ‘radar’ charts of the four sub-indices.

World Economic Forum - Gender Gap Index

12 June 2019

Every year the World Economic Forum (WEF) publishes its Gender Gap Report – the basis of the report is an index is calculated from country statistics in four different areas: economic participation, education attainment, health & survival, and political empowerment. This map represents the overall index as reported in the 2018 report – the most recent at the time of writing.

So why am I writing an update on this now, given that the report was published last year? Because it’s one of the areas I've researched for the presentation I’ve been invited to give to CILT’s International Centenary Convention. The opportunity to participate as a speaker at this event arose from giving a presentation to the Women in Logistics Forum Committee a year ago, which was all about the Gender Pay Gap based on the government’s first ever requirement for employers to submit this data.

I’m keen that my presentation to an international and diverse audience, doesn’t just concentrate on UK data and also doesn’t just focus on pay, as there are many other issues. So I used the data in the WEF report and Maptitude, a GIS package I use for logistics assignments, to produce a global map for one of the slides – here it is! White indicates that there was no data in the WEF report or that it is a territory of a country already included. The red-ish colour represents countries with least equality between the sexes, through to the deeper blue, which represents the most equality.

Aricia Update - CILT - WEF - Gender Gap - Index - Maptitude - gender statistics

Will we see a Grayling effect?

18 April 2019

Yesterday, the ONS (Office for National Statistics) released the SPPI* figures for Q1 2019. The graph below shows the SPPI for All Services at Gross Sector level (dark blue) and the indices for Freight Transport by Road (bright pink), Sea Freight services (dark green) and Ferries for Commercial Vehicles (light green) for the past 5 years.

The graph doesn't show the highest riser in the Transport & Storage grouping over the past five years - that honour goes yet again to Business Airfares. But it shows both the second highest riser, Sea Freight, and the lowest riser, Commercial Vehicle Ferries - this last scarcely managing to get exceed its position five years ago.

The dip in ferry prices in 2016 was ahead of any of us having an inkling that Brexit would be more than a passing phase, but it will be interesting in July, when the next set of SPPI figures is out, to see whether there has been any Grayling effect!

Aricia Update - SPPI - Sea Freight - Vehicle Ferries - Freight Transport by Road - ONS - April 2019 - 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 an all-services industry index.

Pay Gap in Logistics & Transport

5 April 2019

The deadline for submissions for the latest UK government gender pay gap exercise passed at midnight last night and 10,444 companies and organisations have so far submitted, compared with 10,562 for last year – so most companies have complied, although the overlap between the two years is only 9,359 organisations.

This piece is specifically about logistics and transport – see the mainstream press if you want to understand the issues at a national level. In line with the general picture, and looking at all the data, the pay gap in the transport and storage sector has widened, with 79.8% of companies paying men more on both of the main measures.

Looking at the median of the median pay gaps (yes, I realise that statisticians are probably turning in their graves right now, but that’s the best that can be done with the data available), whereas the pay gap in passenger-only transport has gone down slightly, the pay gap in logistics has risen from 5% to 6.05% in favour of men. The real change in our sector has taken place in companies that are involved in both passenger and freight transport (mainly air transport and transport infrastructure) where the massive gap of more than 23% has reduced to just over 17% - but still a challenge for those companies to address. The graph I’ve used splits the data in a different way and shows the pay gap by mode – in all modes the median man is getting paid more than the median woman. Cont below graph...

Aricia Update - Transport & Storage - Gender Pay Gap - April 2019 - logistics and transport statistics

If you think logistics and passenger transport don’t have a problem, though, think again. If you look at companies which have submitted for both years, so you’re comparing like with like, and again looking at the median of all the data points, whereas other types of company and organisation have over 39% of women in the top quartile, for logistics companies that figure is just over 14% and for passenger transport it has actually reduced to just over 9%, when women make up just over half of the population.

You can find descriptions of how the pay gap is calculated and some of the causes of the gap in a presentation I gave to the Women In Logistics Forum Committee last year and I’ll be presenting on this topic at this year’s CILT International Centenary Convention on the final day.

Transport & Storage - an ever-changing business

25 March 2019

Last week the ONS (Office for National Statistics) published its latest figures for job vacancies across the UK, and I was freshly struck at what a changeable business we are.

What these two graphs show is employment of men (blue) and women (pink) – the top graph is all sectors and the lower one Transport & Storage, with numbers in employment measured against the left hand axis. On the right hand axis is the volume of vacancies, which is shown by the grey line.

The overall picture is that our industry is very erratic when compared with the country as a whole, and with our peaks of employment and vacancies rarely coinciding with what we all tend to regard as “peak”. The final vacancy plot on the Transport & Storage graph is my own estimate of what the vacancy figure will be for Jan-Mar based on the two previous rolling quarters …continued below graph.

Aricia Update - Transport & Storage - Employment & Vacancies - ONS - March 2019 - logistics and transport statistics

I’ve written before about the drop in employment in our industry when the most recent recession hit, compared with just a wobble in the plateau of total employment (the bit I’ve highlighted with an oval). Although we only represented 5.5% of the total number of employed, we represented more than a quarter of the lost jobs that dip illustrates. We were very good as an industry at cutting costs, but not so good at looking to the future.

Now I need to say that the periods are different for the two measures with the total in employment reported by conventional quarters that are not seasonally adjusted, whereas vacancies are reported by rolling quarter and are seasonally adjusted – I have selected the rolling quarter that matches the conventional quarter.

All sets of figures are in thousands and I’ve made the relative scales proportionate, so that although you have to have a different scale because of the different numbers, the volume of vacancies when compared with the numbers in employment is the same for both the total and Transport & Storage.

And of course the other thing that strikes you is the relatively small proportion of women employed in our industry compared with the country as a whole - an area where our industry demonstrates little in the way of change.

The Pressure Cooker

20 February 2019

Bit of a different update - a personal story: I'm going to talk about cooking the books.

What do the Tesco accounting scandal and M&S 1Bn profit have in common with my first proper role in logistics? Pressure to improve the figures.

Towards the end of last month, Carl Rogberg was cleared of master-minding fraud. He was cleared along with the two other Tesco directors, but the fact remains that, in what has been described as a culture of pressure back in 2014, payments from suppliers were being manipulated to make the finances look healthier than they were.

I was interested that, in all the reporting, little mention was made of similar situations in other companies. Because I worked for the company, my own mind immediately jumped to M&S in the latter half of the 1990s.

Towards the end of Rick Greenbury's CEOship, when great pressure was put on all departments, and in turn on suppliers including our logistics contractors, necessary expenditure and investment was delayed and supplier profit margins were cut, as we all understood that every spare £ was going to be needed. And then the headlines: M&S made over a billion profit that year.

Now, you can put the squeeze on operations, but only until the pips squeak. When you try to squeeze year after year (at the risk of too many metaphors), you find that the well has run dry. The Wikipedia entry includes the phrase "profit margins were pushed to untenable levels". This non-strategy catches up with you and, yes, the inevitable happened – M&S profit was down dramatically.

So what do these national stories have in common with my first logistics role? I had been a graduate management trainee with NFC (National Freight Corporation – now part of DP DHL), and as part of that training had learned all about how NFC managed its finances, with every contract running its own P&L.

My first role after training was as deputy manager of a DC. The manager was leaving the company and the existing deputy manager was being promoted, but rather than taking on the same activities as the previous senior manager, our roles were in some respects reversed because of my understanding of the company’s administration. So I was responsible for the finances.

The first time it fell to me to do the monthly provisions /accruals, the area general manager, who was based elsewhere, checked my confidence levels. I said I was pretty confident I knew what I was doing, but I was going to take it all home and work on it quietly over the weekend.

I couldn’t wait for Monday to come round! It had gone really badly. The contract had been gently profitable up to now, but my weekend exercise had ended up showing a loss. So I drove over to see the area manager and we pored over my figures. They were right. The contract was making a loss.

There was a big fuss and hoo-hah, and one of the directors became involved: had someone been fraudulent? Well, not for themselves I was able to reply - no-one had actually walked out the door with any cash. This was down to genuine invoice payments being spread over too long a period. So a bit of a shock, and it left the issue of lack of profitability, but all out in the open and all apparently understood …until the following week.

In NFC we had to submit what were called ‘Quicks’ every week – a quick version of the P&L for that week. No PCs in those days – you rang your quicks through to your area manager, and they were consolidated for the area and rung through to head office. I reported a small loss that was commensurate with what had been shown by my previous exercise. The area manager immediately said that was no good and told me what figure he needed me to report (a profit). I wouldn’t. But at that point I could immediately understand why the finances had got into a mess and why the previous manager had left. He’d given in to being bullied and couldn't see a way out.

Now, returning to my reply to the director, I realised that because we were all bonused on the profit that was made, my answer had the potential to be not entirely correct, because if anyone had been paid bonus on those adjusted accounts, that would have been fraud. Money would have gone out the door.

My takeaway from this story is that you need to be extremely careful not to exert undue pressure on those below you. Some people prefer an easy life, and although you may not ever have intended them to be influenced to the extent of doing wrong, that can be the result.

And you need to be extremely careful about how people, including (particularly?) those at senior levels are incentivised.

Could Brexit break the deadlock?

22 January 2019

Part way through last week, the ONS (Office for National Statistics) released the SPPI* figures for Q4 2018. The graph below shows the SPPI for All Services at Gross Sector level (dark blue), the overall index for Transport & Storage (orange) and the index for Freight Transport by Road (bright pink) for the past 5 years.

You can see that the overall index for Transport & Storage (which currently contributes just under one fifth to the All Services index , spans all modes and will include passenger related activities as well as logistics) has risen faster than inflation for businesses generally and indeed is credited with being the largest contributor to business inflation generally over the past year. Whereas Freight Transport by Road, has risen by only just over 4% over the past five years in total - the lowest of all elements in Transport & Storage.

This low rise has been caused by all sorts of factors, but includes the commoditisation of transport and today's purchasing culture which can make it difficult to maintain long term relations with clients. And it has resulted in very low margins - Richard Burnett, CEO of the RHA, was quoted in Logistics Manager late last year as saying that an average SME operator makes around £60 profit per truck per week - haulage is a very low margin business!

While Brexit feels like a disaster, could it in fact be an opportunity for the industry, breaking the deadlock on rates? If no deal goes ahead, things could get very nasty, but in every crisis there is opportunity ...only if you grasp it, though.

Ian, my husband and business partner, was Group Distribution Manager for the country's largest catering butcher in the period spanning the Foot & Mouth crisis. Business associates would say: this must be a terrible time for your company. Not at all. Not one little bit. Fairfax Meadow were on the front foot, sourcing meat from alternative markets, and with the opportunity to take back control of rates, busting the log jam.

Instead of unpredictable and unpaid "demurrage" of trucks, the logistics industry doesn't need to be a victim - it can benefit by helping the country through this hard time, but it does need to ensure that it fully understands its own cost structures and cashflow, and has the right agreements in place. Brexit could be that opportunity.

Aricia Update - SPPI - Transport & Storage - Freight Transport by Road - ONS - January 2019 - 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 an all-services industry index.

One of the most boring graphs...

21 December 2018

For many a year the most boring graph in the world. There was a little bit of excitement in 2016 when the gradient looked to make a more dramatic change, before again settling into a slightly steeper slope. The graph shows the annual moving average of internet sales based on the latest figures released yesterday by the ONS (Office for National Statistics).

As reported elsewhere, at 21.5%, the percent of all retail sales that online sales represented last month, was the greatest it's ever been. Black Friday was comparatively early this year, because of how Thanksgiving fell in the US - always the fourth Thursday with Black Friday the day after. But even before Black Friday was introduced to the UK, November was often the month with the largest proportion of retail sales occurring online.

Aricia Update - Ecommerce - Online - Internet sales - ONS - December 2018 - Retail statistics

NB In 2016, Prologis published a report on ecommerce, with a rule of thumb for the US which translated to about 1m sqft per £1bn turnover, with ecommerce needing three times the distribution centre space required for traditional brick-and-mortar retailers. Using that rule of thumb, would mean that the UK now has c45m sqft of additional warehousing just to support the different format of shopping.

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 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 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 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