>>why the fight against congestion is vital - Garry Mansell, Md of Freight Traders (subsidiary of Mars UK)
According to a recent CBI report on UK transport, congestion in Britain is now costing an estimated £20bn annually. And retailers are paying their fair share of this cost. What’s more, this month the Department for Transport releases a quarterly report on traffic in Great Britain, which is expected to announce more increases in the rate of congestion. The squeeze is being felt more and more by the retail sector and is getting progressively tighter.
This is because, for manufacturers, getting goods from A to B when delivering to retailers is complicated by congestion and delays. Delays are compounded because if carriers miss their delivery slot, they are forced to wait until another becomes available. And if there is a second load to deliver, then it can result in another delivery slot being missed. The vicious cycle generated by congestion is perpetuated.
In fact, manufacturers and carriers now consider congestion inevitable and have to factor it into their delivery plans. This adds to the problem.
The potential therefore exists for the scenario where carriers use two vehicles rather than one just to ensure they hit their delivery slots. Again, this triggers a series of harmful knock-on effects, including increased congestion on the road and increased costs to manufacturers, carriers and retailers. This ultimately results in increased costs to the consumer which, as everybody knows, does not make sound business sense.
The problem extends beyond the retail sector to the rest of UK plc as a whole. The CBI report ‘Is transport holding the UK back?’ also revealed that 70% of senior business people consider UK transport to be poor, but 85% believe investment decisions are influenced by the quality of transport.
This speaks volumes about the potential business
opportunities the UK might be forfeiting by not tackling transport issues such as congestion.
And the retail sector is by no means immune to this.
Yet with congestion causing such disruption to UK businesses, it is all too easy to find a scapegoat, and unfortunately this tends to be the freight industry. But the fact is that the majority of congestion is caused by private cars not freight carriers. This is not to say the freight industry does not contribute to the problem. Having empty or half-full vehicles on the road is of course undesirable.
Helping freight companies exploit other modes of transport, eliminate empty running and have full vehicles on the road more of the time would cut costs and address the problem.
Collaborating when buying freight is one way to do this. It also makes financial sense as costs can be shared. However, formal collaborative buying often fails because one shipper feels that it subsidises the other.
To get round this, many companies are now choosing to award freight using electronic marketplaces.
This allows them to make freight available to a diverse approved group of carriers and lets the market reveal the similarities that can be exploited. In effect, it gives manufacturers the benefits of collaboration without the aggravation.
Yet congestion on roads should not be the only concern for retailers. Some estimates state that UK ports could run out of capacity in three to five years time, which could have disastrous consequences for retailers relying on imports via the ocean.
With the UK already struggling to keep up with the rest of Europe in terms of productivity levels, it is important that the country is seen to be combating any other additional problems, such as congestion or poor transport infrastructure.
Failure to do so may allow Europe to gain another competitive advantage.
According to a recent CBI report on UK transport, congestion in Britain is now costing an estimated £20bn annually. And retailers are paying their fair share of this cost. What’s more, this month the Department for Transport releases a quarterly report on traffic in Great Britain, which is expected to announce more increases in the rate of congestion. The squeeze is being felt more and more by the retail sector and is getting progressively tighter.
This is because, for manufacturers, getting goods from A to B when delivering to retailers is complicated by congestion and delays. Delays are compounded because if carriers miss their delivery slot, they are forced to wait until another becomes available. And if there is a second load to deliver, then it can result in another delivery slot being missed. The vicious cycle generated by congestion is perpetuated.
In fact, manufacturers and carriers now consider congestion inevitable and have to factor it into their delivery plans. This adds to the problem.
The potential therefore exists for the scenario where carriers use two vehicles rather than one just to ensure they hit their delivery slots. Again, this triggers a series of harmful knock-on effects, including increased congestion on the road and increased costs to manufacturers, carriers and retailers. This ultimately results in increased costs to the consumer which, as everybody knows, does not make sound business sense.
The problem extends beyond the retail sector to the rest of UK plc as a whole. The CBI report ‘Is transport holding the UK back?’ also revealed that 70% of senior business people consider UK transport to be poor, but 85% believe investment decisions are influenced by the quality of transport.
This speaks volumes about the potential business
opportunities the UK might be forfeiting by not tackling transport issues such as congestion.
And the retail sector is by no means immune to this.
Yet with congestion causing such disruption to UK businesses, it is all too easy to find a scapegoat, and unfortunately this tends to be the freight industry. But the fact is that the majority of congestion is caused by private cars not freight carriers. This is not to say the freight industry does not contribute to the problem. Having empty or half-full vehicles on the road is of course undesirable.
Helping freight companies exploit other modes of transport, eliminate empty running and have full vehicles on the road more of the time would cut costs and address the problem.
Collaborating when buying freight is one way to do this. It also makes financial sense as costs can be shared. However, formal collaborative buying often fails because one shipper feels that it subsidises the other.
To get round this, many companies are now choosing to award freight using electronic marketplaces.
This allows them to make freight available to a diverse approved group of carriers and lets the market reveal the similarities that can be exploited. In effect, it gives manufacturers the benefits of collaboration without the aggravation.
Yet congestion on roads should not be the only concern for retailers. Some estimates state that UK ports could run out of capacity in three to five years time, which could have disastrous consequences for retailers relying on imports via the ocean.
With the UK already struggling to keep up with the rest of Europe in terms of productivity levels, it is important that the country is seen to be combating any other additional problems, such as congestion or poor transport infrastructure.
Failure to do so may allow Europe to gain another competitive advantage.
No comments yet