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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

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

8 Out of 10 Employees..

11 November 2016

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

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

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

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

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

I've included particular occupations for particular reasons:

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

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

Driving - The Nation's Hardest Workers

1 November 2016

I wasn't intending to revisit the topic of drivers' hours, but last week the ONS (Office for National Statistics) published the latest Annual Survey of Hours & Earnings. Among a wide variety of statistics, they include paid hours worked by occupation, one of which is "Transport and mobile machine drivers and operatives" - wider than HGV drivers, it includes approx 670K full-time workers.

A quick explanation before looking at the graph. The median is the value below which 50% of jobs fall. It is ONS's preferred measure of average as it is less affected by a relatively small number of very high values. It therefore gives a better indication of "typical" than the mean. And percentiles mark the values below which certain proportions of jobs fall - for example, the 75th percentile is the value below which 75% of jobs fall.

What the graph below shows is the estimated hours worked per week across all occupations in the UK (red) and those worked for Occupation Code 82, Transport and mobile machine drivers and operatives (blue). The different shading shows median (deep colour), 75th percentile (lighter colour) and 90th percentile (outline only).

It can be seen that this occupation grouping, which includes HGV drivers, works considerably more hours than the UK average for full-timers (to which, of course, it is a contributor), and is the occupation (out of 34 groups) with the highest median, 75th and 90th percentiles.

Aricia Update Graph - ASHE - Annual Survey of Hours & Earnings - 1 November 2016 - ONS - Drivers Hours - Logistics Statistics

Some other notes: 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. I've used the figures for full-time (so no part-time employees included). It should be noted that these figures are provisional and are accompanied by indications of their likely accuracy.

Could Brexit deliver positive change in UK logistics?

24 October 2016

The newspapers are currently full of all the disadvantages, both realised and potential, that arise from the "decisive result"* in the EU referendum. Assuming the country does go ahead with Brexit, there is potential improvement it could bring to the logistics industry and that is revision of hours rules that apply to drivers of heavy goods vehicles on non-international journeys.

In fairness to the EU, I think that the legislators had envisaged time would be more controlled by the amount of driving that could be undertaken, and hadn't foreseen a situation where the UK driver's life consisted of so much hanging around for one reason and another. Are the long days that have resulted, certainly in this country, one of the things that stops driving being an attractive job option?

Before EU drivers' hours regulations came along, the Transport Act of 1968 restricted the driver's working day to 12.5 hours through what was referred to as "spreadover".

And that was the case up until the amendments in 1986, which abolished the 1968 limits on driver duty when a driver was covered by EC rules - the new provisions on rest periods within the EC rules were seen as effectively limiting the hours for which a driver could be on duty.

In 2005 the Working Time Directive was applied to the road transport industry, with the very weak interpretation of PoAs (Periods of Availability) that was adopted in the UK. And that weak interpretation was accompanied by a casual approach to its use, in many ways turning what should have been protective legislation into just another administrative task.

However, until 2007, any reduction in daily rest from 11 to 9 hours still had to be made up by the end of the following week. After EC regulation 561/2006 was introduced in April 2007, no rest compensation was required.

Could a return to the past be helpful? Certainly pay would need to reflect the change as drivers would still have the same rent to pay and families to feed. It would not be an easy pill for industry to swallow. But I'm interested in how much could be made up for by efficiencies: reducing PoAs, which are often effectively an admission of wasted driver time. Would limiting the length of the working day back to the 12.5 hour spreadover help to make the job more attractive?

That change in April 2007 means that each and every week can include three 15 hour days. And after each of those 15 hours days, the driver needs to travel home, eat and say goodnight, before sleeping for a few hours and then getting up again ...quite probably at what I've seen described as stupid o'clock. Would you want to work those hours?

*37.4% of the UK electorate voted "Leave" in the EU referendum.

As this update is more of a blog, with no statistics as such, I've gone for a Wordle rather than a graph this time - click the pic to see how to create your own:

Aricia Update - Brexit - drivers hours - legislation - spreadover - 24 October 2016 - Logistics - Wordle

Update on 9 Nov: It's great to see this piece reported on in Transport Operator as part of a piece on driver wages.

Think of all that cleaner air

30 April 2016

Truck drivers may be getting older, but their vehicles are getting younger.

Earlier this month the Department for Transport published its vehicle registration figures for 2015, showing a 39% increase in the number of artics newly registered compared with 2014. This is no great surprise - I reported just over a year ago on the impact that Euro emissions legislation was having on goods vehicle registrations.

What the graph below shows is the percentage of artics that were less than a year old at the end of 2015 and those between one and three years old. You can see the recession, but also the recent impact that Euro VI had on purchasing decisions. And we're now at a point (not shown on graph) where the number of units under six years old can be presented as 75% if you round up the decimals ...the first time in 10 years that you've been able to say that. These trucks will represent the vast majority of trunking mileage - think of all that cleaner air.

Aricia Update - goods vehicle registrations - 30 April 2016 - DfT - logistics statistics

The Productivity puzzle

14 April 2016

The news that UK productivity dropped in the final quarter of 2015, set me thinking about the productivity puzzle again. The productivity puzzle is different from the productivity gap - the productivity gap is about our country's output per hour being markedly lower than some others in the developed world.

The productivity puzzle, however, is about why our output per hour hasn't picked up again post-recession. Everyone can understand why it dropped off during the recession, but why won't it pick up again? And when I say everyone, I mean everyone including the Bank of England ...and for a while. The graph below is not one I've created myself, but one from a speech by Martin Weale, External Member of the Monetary Policy Committee at the end of 2014. Cont below graph.

To access Martin Weale's speech, please click on the graph itself.

Aricia Update - Productivity Puzzle - 14 April 2016 - GDP - Retail sales - internet - homeshopping - Statistics

However, I think that puzzle may be down to us. Logistics has facilitated the home shopping revolution. And with it a world where instead of merchandise being delivered to stores in relative bulk, items now have to be individually picked and packed. Then delivered to people's homes, not once but possibly a couple of times, until the driver finds someone available to accept the parcel. And it doesn't stop there, because a good proportion of those goods then comes back again as returns. So say, for the sake of argument, 75% of the goods are retained by the customer - they just have an uplifted work content. But for the other 25%, all that work so far has been in vain, and now they have to be got back to base and reprocessed. Lots of extra hours for no gain.

Now, at the beginning of the recession, online was still at a low-ish level. The Office of National Statistics only publishes internet sales from the end of 2006, as prior to that no-one had considered it significant. But now internet sales represent 12.5% of retail sales of £340Bn. GDP is £1.8Tn.

In a period of unemployment combined with a desire to experiment, and a desperate need by retailers to boost sales, has the logistics industry actually facilitated a sort of negative productivity - not for ourselves, but for our country? And with Black Friday and the normal madness of peak, I rest my case, and point to my evidence, M'lud: productivity dropping off in the last quarter.

I'd like to pull together some comparable statistics across a variety of companies so I can increase the credibility of some elements of my calculations. So if you work in a retailer with both bricks & clicks, or for a 3PL processing returns, or in a parcels company doing home deliveries, and would be happy to share some statistics with me on a confidential basis, please get in touch.

MOD answers on vampires

1 April 2016

I'm breaking with tradition for this post - I'm not including a graph. But that doesn't mean this post isn't about statistics. And I'm also breaking with tradition for this date - this isn't an April fool, it's not a joke piece. This is a plea to take Freedom of Information seriously, by using this day of jokes to draw attention to some of the questions that our public organisations are expected to answer...

Aricia Update - Not April Fool - 1 April 2016 - MOD - Freedom of Information - FOI - Statistics

For instance, this one addressed to the MOD: How many cases were reported to your constabulary that had one of the following items being reported - Aliens, UFO, Werewolf, Vampire, Magic or any other unknown phenomenon that could be considered occult? If you're interested, you can read the answer here. Now I don't know why that question was asked, and it may have been serious, but equally it may have been asked by a funster ...and I'm not without a sense of humour and confess to a wry chuckle.

But I'd like to log that I've been very impressed recently with the responses I've received to Freedom of Information requests, including from the MOD - polite, helpful beyond a pat answer, happy to answer additional questions and note any provisos, and, in most cases, timely. So, I hope that, when there are questions about werewolves etc, it cheers up the life of someone who's normally being asked boring questions like how many HGV licence holders there are in the military.

Thank you all!

Warehousing - all TOPSI Turvy

21 March 2016

What's happening in warehousing? On Friday last week, the latest figures for the delightfully-named TOPSI* (Turnover and Orders in Production and Services Industries) were released by the ONS (Office for National Statistics), revealing that the turnover figure for warehousing had dropped yet again in January - its seventh successive monthly drop. And it can be seen in the graph below that these drops have impacted on the figure for the whole of 2015.

The graph shows the figures for "Land transport & transport via pipelines, excl. rail transport" and for "Warehousing & support services for transportation" annually for the period 2005 to 2015 inclusive. I didn't cover the storage element of the SPPI (like the CPI but for business costs) in my previous update, but it went down only very, very slightly in 2015 (less than 0.1% against 2014), so if looks as if the drop in income in the warehousing sector of more than 5% last year, must be due to loss of volume rather than changes in rates. And yet that in a situation where publications from the Telegraph through Retail Gazette and including Logistics Manager all reported on high demand for warehousing earlier this month.

Aricia Update Graph - TOPSI - 21 March 2016 - ONS - Warehousing turnover - Logistics Statistics

*The TOPSI figures are from The Monthly Business Survey (MBS) which collects measures of turnover, export turnover, new orders, export new orders on a monthly basis from production industries (UK), and services industries (Great Britain) - transport and warehousing are both in the latter grouping. Figures are collected from a sample of approx 30K businesses at current prices and industry estimates are calculated by extrapolation of the sample results.

Restrained Freight

26 February 2016

Earlier this week the ONS (Office for National Statistics) released the latest SPPI* figures, including for the full year 2015. On the graph below I've included a variety of freight and passenger transport indices. The ONS has recently rebased these figures to 2010, so all indices = 100 for that year. But the annual figures published this week don't include 2011 (so the lines on the graph go straight to the value for 2012).

The sudden increase in one year for commercial vehicle ferries was EU legislation, which forced operators of ships in the English Channel, North Sea and Baltic Sea to adopt more expensive low-sulphur fuel. And freight forwarding is doing it's usual thing - here's an explanation of the reasoning behind its counter-cyclical movement. But what the graph really shows is the restrained increases in freight (road and rail) when compared with passenger fares (air and rail) - prices for airfares being put down to capacity constraints, and unregulated rail fares not controlled by inflation-related increases.

Aricia Update Graph - inflation - 26 February 2016 - ONS - SPPI - Road freight - 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.

Tax burden continues to rise

27 January 2016

Last week, the Office for National Statistics published the latest inflation figures. They also published data for the TPI* for the whole of 2015 - the TPI is the Tax and Price Index. Investopedia defines TPI as: A measure of the percentage that a consumer's income would have to adjust by in order to maintain the same level of purchasing power. The tax and price index (TPI) takes into account changes in retail prices due to inflation, as well as changes to direct taxes that reduce a consumer's disposable income.

The graph below shows how the TPI has changed compared with the CPI over the past ten years - despite the CPI being stable across 2015, the tax burden has meant that the consumer has continued to get worse off. The impact of the VAT changes in 2008 to 2011 can be seen clearly - VAT was reduced from 17.5% to 15% from December 2008, returned to 17.5% in January 2010 and then increased to 20% from January 2011.

Aricia Update Graph - TPI & CPI - Taxes and price inflation - ONS - 27 January 2016 - inflation statistics

*The TPI is NOT defined as a national statistic. 'National Statistics' are a subset of official statistics which have been certified by the UK Statistics Authority as compliant with its Code of Practice for Official Statistics. So it needs to treated with a little more caution than those statistics that are formally counted as 'National Statistics'.

Thanks to this website for the excellent £10 pic:

There is no driver shortage

12 January 2016

I'm going to contradict what I've only recently put in writing, so let me explain: my conclusion is that most people who have gone to some cost, time and effort to get qualified as HGV drivers do not use those qualifications. While I continue to be very concerned about the driver age profile, I now disagree with some of my previous conclusions, including that driver numbers have become a national issue. In part, I fell into a trap of believing that what some parties in our industry were saying. I'm now back where I started, believing that our industry needs to stop moaning and put its money where its mouth is.

Here is a link to the full version of this driver numbers analysis.

I said before that this was about attracting fresh blood, but it appears that this is not the case. There are 80K drivers in the age band 25-44 who are ready to go - they have an LGV licence and they have a DQC, they just don't choose to use them - they're keeping their hand in "just in case". And there are another 90K in the 25-34 age bracket with LGV entitlement and with apparently no need to do much more than a week's training (without a test) to get a DQC.

This is about re-inspiring people who took their licences and couldn't hack the job for whatever reason. If it were just one or two people, then you could put it down to their own unrealistic expectations, but it looks like there's tens, even hundreds, of thousands - our industry isn't just less attractive to younger people, it's not that attractive to any age group. So how do we get some of those qualified people to come and drive a truck?

Although there's not much we can do about the legislative burden that drivers have to shoulder these days, there are things that our industry can do for itself. As I've said before, it involves looking after drivers - giving them self-respect by paying them an attractive rate for sensible hours, and providing some decent facilities at DCs and out on the road. We need to ask ourselves how many older drivers would come into the industry today, particularly as agency drivers. Increased wages and training need to be built into increased operating costs and charges for transport need to go up.

So how and why have I changed my mind? In the January 2016 edition of Focus, the Chartered Institute of Logistics & Transport journal, I said that I'd asked DVLA for the data for all C and C+E drivers with DQCs in five-year age bands. And I'm very grateful for another prompt and helpful response. I was sceptical about the DVLA LGV entitlement figures to start with, to the extent that I didn't put them in my latest Focus article. But with the DQC figures, which DVLA provided just before Christmas, and answers to my questions at the start of the new year, I now have a picture which uses all the available data and seems to me to make sense. I've combined these various sources of data into the graph below.

Aricia Update Graph - inflation - 12 January 2016 - ONS - DVLA - LGV - HGV - DQC - driver shortage - Logistics Statistics

I have returned to believing that the solution is in our industry's own hands. Logistics needs to become the industry of choice. And its custodians need to recognise the real issues - many of our industry leaders are in denial.

Here is a link to the full version of this driver numbers analysis.

If you'd like a speaker on the topic of driver numbers and age profiles, do get in touch: Kirsten Tisdale, 01295 758875,

'Tis the Season to be Jolly

16 December 2015

And therefore the season to buy seasonal fare. We buy 'seasonal' fare throughout the year, by definition. But as we approach the Christmas period this country goes mad, suddenly buying so much more food than usual that our local council is currently running radio ads encouraging people not to over-buy and waste, or at least manage to get the correct recycling bin when they do so!

So while we buy seasonal food all year round, the price of that seasonal food suddenly becomes much more of an issue for many at this time of year, particularly when entertaining large numbers of friends and family.

What the graph below shows is the price index for seasonal food as part of the Consumer Price Index figures, including the latest figures released by the ONS (Office for National Statistics) yesterday. It's shown for November to November for each of the years shown so you can see the change in prices over each year. The lightest line is for November 2010 through to November 2011 and the darkest for the year ending last month. I labelled each line instead of providing a key to make identifying each data set a little easier.

The index base is 2005, so prices in 2005 are represented by 100 - off the bottom of the graph. I have included each set of figures as released in December of each year. There are sometimes minor readjustments subsequently - so, for example, November 2012 was revised down between the two sets of figures being released.

Although we won't know December's price inflation until after it's happened, price index for seasonal food in November this year was 6% above five years ago, where prices in general have increased by 11% over the same period.

Aricia Update Graph - inflation - 16 December 2015 - ONS - CPI - Seasonal food - Retail Statistics

PS Thanks to the Daily Telegraph website for the wonderful turkey picture - visit the site which includes a link to some advice on how to stop your turkey being part of that food waste mountain this year.

The Freight-Knicker Index

27 November 2015

The most recent update I did on the CPI put me in mind of a thought I had a long time ago, when I was commissioned by CILT's Membership & Marketing Committee to work on the CILT from the CILT (Cost Indices for Logistics and Transport from the Chartered Institute of Logistics & Transport). Namely, the Freight-Knicker index - an index which shows how the freight element of a pair of knickers varies over time, and similarly the Freight-Korma index.

The biggest hurdle was, and remains, sourcing the price of knickers and korma quarterly in arrears over a number of years, and so what I present you with today aren't the true Freight-Knicker and Korma indices, but are based on the clothing and food elements of the CPI, along with the road freight element of the SPPI* - the latter released by the ONS (Office for National Statistics) earlier this week. I've rebased both set of indices back to five years ago and then done a simple comparison. I've displayed only the Q3 figures for each year (the most up-to-date figures for the SPPI which is a quarterly index), because of the general seasonality of clothing which wouldn't be displayed by underwear.

As expected, the two indices show quite different paths on the graph below - currently it's the Freight-Korma which is the more interesting, and presenting food logistics providers with challenge.

Aricia Update Graph - inflation - 27 November 2015 - ONS - SPPI - Road freight - SPPI - transport - CPI - clothing - food - REtail and 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.

A handle on driver age profile for the first time?

16 November 2015

Over the past month or so, I've published a couple of pieces on the driver shortage and age profile of HGV drivers - one in the Chartered Institute of Logistics & Transport's Focus magazine, and the other as an update on our own website and as a Linkedin post. The more I've researched it, the more interested I've become in the paucity of statistics around this issue. Previously published figures didn't reveal what was happening between the ages of 35 and 64 - it could even have been interpreted as being pretty flat if you didn't know the industry. And these are the figures decision makers see and use.

So I made a special request for data from the Office for National Statistics which was published earlier today - I'm very grateful for the prompt response! This data is in five year age bands (apart from the very youngest and oldest drivers), and to my knowledge is the first time that these figures have been published at this level of granularity. You can see some of this data included in the graph (update continues below graph).

Aricia Update Graph - HGV Driver Numbers - by age band - 16 November 2015 - ONS - Logistics Statistics

What are the headlines from the graph and other fresh statistics?

  • There were less HGV drivers employed July to September 2015 than in the previous quarter and against the same period last year - interesting
  • The profile is anything but flat between 35 and 64 - we all knew it wasn't, but now everyone can see that is the case
  • Over the past year, the age band with the largest number of drivers stopped being 45-49 and moved to 50-54 - drivers are getting older
  • The number of over 65s continues to increase - drivers are getting even older
  • But the real headline is that we can see the age profile properly for the first time

Where does this information come from? It comes from the Labour Force Survey, and I quote: The primary purpose of the Labour Force Survey (LFS) is "providing good quality point in time and change estimates for various labour market outputs and related topics". The labour market covers all aspects of people's work, including the education and training needed to equip them for work, the jobs themselves, job-search for those out of work, and income from work and benefits.

How do they establish how many HGV drivers there are? The sorts of questions asked in the surveys to establish what work people do include "What was your (main) job (in the week ending Sunday the [date])?", "What did you mainly do in your job?" and "What did the firm/organisation you worked for mainly make or do (at the place where you worked)?". The surveys also ask about work-related and vocational qualifications such as HGV and forklift licences.

Now a survey is a survey. ONS will have designed the sample to give statistically significant results - indeed some of the supporting documentation describing how they go about this runs to over 100 pages a piece. With the sample consisting of about 100,000 individuals per quarter, large goods vehicle drivers representing about 1% of the workforce and then broken into 10 age bands, it doesn't take a mathematician to see that there is room for the figures to have some 'flexibility'. But overall they contribute to the same storyline.

What it would be good to see now is data about ALL large goods vehicle drivers - the DVLA DQC data that was published by the FTA earlier this year, split by narrower age-bands. At the same time that I asked the ONS (who it has to be said are set up to provide statistics, by definition) for enhanced data, I also asked DLVA ...early days, but I've yet to have a reply to my email.

You can access the data and read about how to interpret it.

And you can read my other recent pieces on the driver shortage and age profile stats here: Focus article (see top link) and in the update below.

And here's some Linkedin conversation following the update above:

Linkedin conversation - Jonathan Rose - Charles Cawley

National Lorry Week - #LoveTheLorry

29 October 2015

The RHA needs to be congratulated on the initiative that is National Lorry Week and the #LoveTheLorry / #HGVHeroes campaign. And its members need to be thanked for rising to the occasion and putting on imaginative events around the country, demonstrating to the public that the industry takes pride in its task of delivering the daily miracle that is logistics. It's inspiring, and we all need to hope that it will attract new drivers. No-one should be in any doubt that the industry desperately needs them, with younger HGV drivers coming on-stream at less than a third of the rate required to replace older ones.

RHA members as a group were hit hard by the drop of business in the recession, with tonnage carried by mainly public carriers dropping by more than a third over two years. Own account operators kept their business in house and had a much more stable workload, with tonne-km even going up over those same two years. Unfortunately the latest DfT figures in this area are for 2013, so it's not possible for me to say where things are today, but no doubt those same RHA members will be expecting and wanting to take up increased business but with a limited key resource, namely HGV drivers.

What is available for June 2015, is the licensing figures, which show that there are 7% less HGVs than in 2007, although those vehicles have been getting heavier - in 2000 around 26% of artics were over 40 tonnes, whereas by 2013 this had risen to 77%. And HGV mileage has been reducing - by 2013 over 10% less than in 2000. I know that some believe the reduction in HGV miles is a good thing, potentially demonstrating efficiencies in our industry, but I don't think that view can be supported - in the same period, light van traffic rose by over 30%. Now, the nature of the jobs some of those vans carry out, like delivering to homes and restricted town centres, cannot be undertaken by bigger vehicles, but we need to avoid the situation where vans are being used as a substitute for proper trucks because they don't require an HGV driver.

Now some may regard my next point as history, but I'm going to raise it as I believe its ghost is still haunting us. The removal of the 12.5 hour spreadover back in 1986 facilitated, at best, laxness to creep in when scheduling drivers - agency drivers waiting for work, spending an eight hour day in the works canteen before being given five drops in central London. At worst it allowed managers to contemplate scheduling workers' lives in a way where day drivers could morph into night drivers. And when the Mobile Workers Directive came in, Periods of Availability allowed that laxness to continue. However, hauliers now rely on this flexibility to get the job done. And therein lies the rub.

Commentators who say that people know about the conditions and long hours when they come into the industry are missing the point. One has to ask how many older drivers would come into the industry today, particularly as agency drivers. It's not about those already in the industry, they are putting up with it - this is about attracting fresh blood, and fast.

So congratulations and thanks to the RHA and its members - I want to be able to carry on buying food and all the other stuff, and I'm grateful to everyone who gets it there!

There is no graph or map with this update, but if this subject interests you, there's a link on our Presentations & Articles page to an article on the driver shortage in CILT's November 2015 Focus.

And here's some Linkedin conversation following the update above:

Linkedin conversation - RHA - Steve Bowles - Alan White

If only I had a crystal ball!

18 October 2015

The ONS (Office for National Statistics) released the latest CPI figures last week, with the headline news being that UK inflation had turned negative again, albeit only very slightly at -0.1% in September. The small negative was attributed mainly to a smaller than usual rise in clothing prices and falling motor fuel prices.

When I started these updates just over five years ago, it was because there were different pressures on different parts of the retail logistics industry because of the very different inflation rates in clothing and food, and you can see that on the graph I've inset in the bottom left hand corner - the colour key and scales are the same as the main graph. You can see this update in our archives - go right to the bottom of the page.

I included the index for Fuel for running your car in the main graph (orange line), since that was a major contributor to the current negative inflation rate and is something that we've all been aware of at the pumps.

You can see from the main graph that the overall movement in the CPI for the past five years has been less than the previous five. Food prices have been declining since February 2014 - a bit of a shock to an industry more used to inflation. Clothing prices have always been seasonal, in line with the product itself, although I'd have probably described the increase as "less than the past few years", rather than less than "usual".

I guess the big question as always, for us as individuals and as business people, is where will fuel go next? If only I had a crystal ball!

Aricia Update Graph - Inflation - CPI - Clothing - Food - Fuel - 18 October 2015 - ONS - Retail Statistics

Five year celebration!

2 September 2015

Last week the ONS (Office for National Statistics) published the latest SSPI* figures. And for five years now, Aricia has been publishing these updates which aim to bring relevant government and industry statistics to life.

So, in the graph below, rather than selecting just a couple of indices and tracking their changes, I've included a much wider selection of indices that are likely to be of interest to business people working in logistics and transport, and shown the overall change in prices as a percentage over the past five years, with the top level Gross / GSO* index shown in a contrasting colour, unsurprisingly in the middle of the spread of values.

This selection does include the top rise in prices, business airfares, which perhaps surprisingly continue to rise in price. And it also includes the biggest reduction in prices over the past five years, recycling, or sorted materials recovery services and secondary raw materials as it's known.

Aricia Update Graph - inflation - 2 September 2015 - ONS - SPPI - Road freight - SPPI - 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 - 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 Q2.

Time to look outside?

30 July 2015

Earlier this month Croner published this year's Distribution & Transport Rewards - always an excellent source of information.

One's immediate reaction is to be a little bit surprised that, with all the talk of the driver shortage, median average earnings for a Class C+E driver have taken a bit (4%) of a dip in the latest survey and median basic pay is continues to be down against 2013. Now, any survey depends on who participates, and it could be that a high paying company has dropped out. But now we're in the new normal following the recession, it's as important to understand what wages can buy, and where they're pitched, as what they are per se. To what extent does all the hard work of getting and maintaining a class 1 licence pay for itself?

The graph below shows Class C+E basic pay and average earnings over the past 10 years as a percentage of corresponding light vehicle driver wage levels. Back in 2005, following the first wave of eastern Europeans arriving in 2004, an artic driver could expect a 20% premium for having his (or her) licence. Despite the ups and downs, that premium has now risen to 40% or more depending on whether it's basic or earnings that you're looking at. So why isn't that attracting younger people as professional drivers, while the number of vans continues to grow? Continued below graph...

Aricia Update Graph - Driver pay - class C+E - HGV - LGV - vans - Croner - 30 July 2015 - logistics statistics

Now, the van drivers' wages may well be pulled down by part-time working, although using the median is likely to have removed this as a factor, but it raises the issue of flexibility. Back in 2004 I wrote a Viewpoint for Motor Transport, very little of which is out of date. Perhaps it's time to repeat the research referred to in my article, which is still available: SfL Scotland Survey 2003 - the comments from former drivers are important, particularly as this group were still sufficiently interested in LGVs and the road haulage industry to have attended Truckfest, where this element of research was carried out.

In the recent CILT survey on the driver shortage, question 27 asked: What factors do you think are responsible for the driver shortage? I'm guessing that this has been completed by managers, but there's no real point in interviewing current drivers - two reasons: they've stuck with it and many of them don't represent the future workforce.

Perhaps there's a need to research outside our own industry and find out what people like about their jobs and explore whether those factors can be replicated for truck drivers.

Freight Rate Seesaw

22 July 2015

With the news earlier this week that supermarket diesel was cheaper than petrol, I thought it was time to have a quick look at how freight rates to and from Europe compared with a year ago, when I put together a slide pack on European transport costs, which you can find in CILT's Knowledge Centre.

In the meantime, not only has the price of diesel gone down by some 16% (104.92 on 17 July a year ago compared with 88.08ppl at the start of this week), but the exchange rates have also meant that you now get about 13% more Euros than you did a year ago (1.27 on 22 July 2014 compared with 1.44 Euros to the £ earlier this week).

The data in the chart below comes from Freightex, and shows that while trips to this country from mainland Europe are the same or more expensive than they were a year ago (priced in Euros), it appears that foreign hauliers must be desperate to get home, with rates the same or cheaper.

Aricia Update Graph - Freight rates - to and from Europe - 22 July 2015 - Freightex - Logistics Statistics

Saving or Spending?

4 July 2015

There were all sorts of statistics out this week. On 30 June GfK reported post-election 'bounce' as consumer confidence increased 6 points.

And out on 1 July was an ONS release with the exciting description: "National Accounts articles, The Saving Ratio: How is it affected by Households' and Non-Profit Institutions Serving Households' income and expenditure?"

The graph below shows both the saving ratio and the net acquisition of loans - and, yes, the latter does go into negative territory on a couple of occasions. In summary, people are back to saving at pre-recession levels (having saved more while things felt less good), but haven't yet been tempted to take out loans at pre-recession levels (it doesn't feel that good!).

Aricia Update Graph - saving spending - 4 July 2015 - ONS - Savings Ratio - Net new loans - Consumer confidence - high street - Retail Statistics

The ONS article ends with the conclusion: "...In more recent periods, the falling saving ratio appears to have been driven by slower increases in income from wages and salaries - rather than large increases in consumption..." And the ONS wonders what might happen next: "...If wages continue to rise more quickly, it will be interesting to see whether households consume more (which will further reduce the saving ratio) or save more, which will increase it."

On 2 July BDO seemed to answer that question, reporting the worst June on the high street for nearly a decade, although apparently we have been spending more on eating out and holidays assuming you're one of the crowd, here's some thoughts from 2014 on building the perfect sandcastle - it's the website I need to credit for the sandcastle pic behind the graph!

Paddy Power - 3/10 on staying in

10 June 2015

To see the source of this graphic, please click on the graphic itself.

Aricia Update Graph - European Referendum - 10 June 2015 - Paddy Power - YouGov - Political Statistics

With the vote following the first debate on the UK's membership of the European Union at 544 to 53 in favour of having a referendum, it's definitely time to start assessing what might be the impact of departure, if it happens. And so where better to start than in assessing how likely it is that the UK will leave the union?

In a commentary piece on YouGov yesterday, Stephan Shakespeare said "In our new poll 'Yes' leads ...but look beyond the headline figures and 'No' voters are more likely to vote".

Right now Paddy Power have the following odds:
In favour of remaining in EU - 3/10
In favour of exiting EU - 21/10

What that means is that there is something like a 77% chance of remaining = 10/(3+10), and a 32% chance of exit - some will have noticed that this adds up to more than 100%, but that's betting for you.

Now most (all?) of the pollsters got it dramatically wrong in the lead up to the election and many are still crying into their surveys and, as the Huffington Post reported, " 7pm the night before the election, Paddy Power's best odds was that there would be a Labour minority government."

Who do you think is most likely to call this one correctly? And what are you doing to prepare for departure if it happens?

And here's some Linkedin conversation (screen capture on 2 July) following that update:

Linkedin conversation - 10 June 2015 - Ray Fowler - Dan Hawker - Mike Vernon

Cycle stability?

28 May 2015

Yesterday the ONS (Office for National Statistics) released the latest SPPI* figures. In the graph below, I've included the index for Freight Transport by Road (bright pink line) and also the overall index (dark blue) at Gross level (see the footnote under the graph). It was the Road Freight index along with some of the other transport indices that first drew my attention to the SPPI, thanks to the Knowledge Centre at CILT, and I'm always interested to see how that is moving in comparison to general business costs.

But I've also included indices for three categories of business expenditure which have somehow returned to the same sorts of prices as five years ago, after following anything but the same path: Freight Forwarding (yellow line), Property Rentals (lighter blue) and Contract Packing (green).

Now the SPPI is not seasonally adjusted, but it can be seen from the graph that these movements that this volatility is not down to seasonality. Property Rentals seem to have been picking up from mid-2013, although please note that the Property Rentals figure is for businesses generally, it is not logistics specific. Contract packing was remarkably stable for most of that same period until the drop in Q1 this year. And given that Freight Forwarding is said to be counter-cyclical due to the business structure, it at least looks as if the cycle has been more stable than at the beginning of the five years of coalition.

Aricia Update Graph - inflation - 27 May 2015 - ONS - SPPI - Road freight - SPPI - 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 - 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 Q1.

Food plods along

22 May 2015

Earlier today the ONS (office for National Statistics) released the Retail Sales figures which showing how retail performed in April. My attention was drawn to retail volumes (as opposed to values) when I was doing some sales benchmarking for client earlier this month. I often rebase retail and logistics statistics to make graphs start an index of 100, but in this case I've left the figures exactly as published, with 2011 as the base year, as my point is well-illustrated by this.

What the graph below shows is the extent to which the volume of non-food purchases was increasing before the recession and has picked up again post-recession, while food plods along. No wonder the erosion of supermarket sales by the so-called "discounters" is so damaging to existing players.

Aricia Update Graph - Retail sales - volume - food - non-food - ONS - 22 May 2015 - retail statistics

And here's some Linkedin conversation following that update:

Linkedin conversation - 27 May 2015 - Lynn Parnell - Noel Blake - Food Volumes - Retail Statistics

Amazing Amazon!

24 April 2015

In the UK a one-hour home delivery means that your order will arrive in a one-hour time window, but in parts of the US it means it will arrive within the hour. Now Amazon doesn't need me to do its advertising, but credit where credit's due - as witnessed by this test of their service by the Statesman last week. And I'm really grateful to Dan Boaz of for his update on Linkedin that drew my attention to the test.

For anyone who doubts that groceries is where Amazon should be, one look at the graph below shows you all you need to know: the comparatively low market penetration of online in food (red) and its high year-on-year growth (blue) when compared with non-food which includes department stores, clothing and footwear, furniture, electricals, audio/video equipment and recordings - the graph is for Britain and doesn't include non-store retailing. The data for the graph is from figures in the Retail Sales report released by the ONS (Office for National Statistics) yesterday.

This is why all the industrial property companies are predicting the growth in small edge-of-urban fulfilment centres ...and if you're in logistics and you don't think that is where life is going, just read MWPVL's research on the properties that Amazon have in the UK - it's the last entry in the UK listing that makes you sit up, about two thirds down the page.

With all of us now doing convenience shopping for tonight's dinner, home deliveries of fmcg/dry/ambient groceries look like the future ...and delivered before you've even switched off the cooker and sat down to eat.

Aricia Update Graph - Internet sales - food - non-food - Amazon - urban fulfilment centre - 24 April 2015 - ecommerce and logistics statistics

And here's some Linkedin responses following that update:

Linkedin conversation - 27 May 2015 - Paul Skrgatic - Zen Yaworsky - Richard Fernley - Amazon Profit Loss - eCommerce Statistics

Pity those in truck manufacturing and sales!

13 April 2015

Last week the Department for Transport released the latest new registration figures for different vehicle types and today the BBC was carrying a news item from the SMMT, the Society of Motor Manufacturers & Traders, on how online shopping was boosting van sales.

Because these new registration figures are always very variable month to month, the graph below shows a moving average which smoothes out normal seasonality. The moving average used is based on the twelve months ending with the data point on the graph - so the point for February 2015 is an average for the twelve months ending February 2015 and so on. The scales on the two different axes are quite different, with more than 8 times as many light goods vehicles as heavy registered in 2014.

It's a couple of years since we've looked at these figures, but what the graph demonstrates is not only the rising van sales that have made today's headlines, but also the continued erratic impact of Euro emissions legislation on the purchase of heavy goods vehicles (see also updates in the updates archive dated 17 March 2013 and 15 March 2011).

Aricia Update Graph - Department for Transport - DfT - new vehicle registrations - 13 April 2015 - transport and logistics statistics

The link between business and crime

1 April 2015

The annual statistics for crime figures run from April to March, and so yesterday represents the end of the most recent period 2014/15. Although the figures won't be available until later in the year, there is already cautious optimism that this will be the last time that they will need to be published.

What you're seeing in the graph on the left below is the number of businesses in the years 2002-14 (maroon line) and the total number of crimes for 2002/3-2013/14 (dark blue line)*. Anyone looking at this graph can see that there is inverse correlation, although the relationship between business and crime is far from straightforward. So the graph on the right plots the two sets of data as a scatter graph (large purple spots) with a trend line (the purple dotted line). Although a linear trend would give a good result with R-squared=0.95**, this second graph shows a polynomial trend line and its R-sq, which at over 0.98 indicates extremely close correlation. And because the number of businesses is already known for 2014, we're able to forecast the number of crimes for 2014/15, which looks to be in negative territory.

Kirsten Tisdale, MD of leading consulting company Aricia Limited, said: "It's unbelievably good news for the government - collating these figures this year is almost a formality, as it looks as if ex-criminals will either be running businesses or even doing good. Businesses and charities need to be ready for this opportunity, harnessing the undoubted innovation skills that many criminals naturally possess, as illustrated by this BBC report".

Aricia Update Graph - business - crime - forecast - department for business, innovation & skills - home office - Business Statistics

*Both sets of data are from the government's own website - follow these links to learn more about the number of businesses from the Department for Business, Innovation & Skills and to find crime data from the Home Office.

**R-sq=0 means no correlation at all, R-sq=1 is a perfect match.