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Logistics SMES struggles as economy decelerates

By August 27, 2020 One Comment
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Logistics UK warns that its research shows that any expansion seen after the lockdown ended has “slowed to a crawl” with small and medium-sized logistics companies “finding things increasingly tough.”

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The group’s data indicated that the nation’s businesses are stagnating after two months’ of cautious reopening, says David Wells, chief executive, Logistics UK. He says that the government needs to step in decisively to avoid massive redundancies and further damage to the long term prospects of UK PLC.

“While the rate of growth was encouraging as the country came out of lockdown, driven by the reopening of some sectors of the economy, that pace of expansion has now slowed to a crawl.  While our larger operators are holding steady, SMEs across the sector are finding things increasingly tough, with less subcontracted work, squeezed rates, and fewer jobs of their own to sustain the recovery.”

“This is bad news for the economy, for employees, and the longer-term future prosperity of our nation and does not tally with the expected ‘bounce back’ or ‘recovery’ we have been told is underway.”

Logistics businesses of all types are finding it increasingly difficult to remain solvent, with the end of the furloughing scheme fast approaching and it will become more expensive for those who stay in the scheme. At the same time, faltering growth is delivering little or no uplift in revenues to meet government demands for repayment of deferred taxes and increased staff costs.  Forget the credit crunch – without a robust and consistent recovery in economic activity, businesses are now facing a cash crunch, and their survival is in doubt.

“Either we need a strategy to stimulate demand and generate growth, or a strategy for containing infection, which will require a significant support package for the long term right across the economy – at the moment, we have neither.  Because of the risk of a second wave of the pandemic, the government might well be apprehensive about opening up the economy further.

“But if the strategy is to slow or reverse the growth in order to stem infections, then urgent action is needed to protect struggling businesses to avoid an avalanche of redundancies and insolvencies. Currently, business is caught in the middle without a plan for either strategy, and a vacuum of government policy, advice, and action, and that’s the most dangerous place to be.”

“Without urgent action and a clear strategy to re-start or re-stop the recovery, the recent flurry of redundancies from big brands like Marks & Spencer and Harrods will only be the tip of a fast-approaching iceberg.”


Information from Global Cold Chain News.

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