UK supply chain and logistics sector driven by innovation as it looks to overcome Brexit hurdles

UK supply chain and logistics sector driven by innovation as it looks to overcome Brexit hurdlesThe recently held Multimodal Show at the NEC saw leading businesses from across a range of sectors that are at the heart of the future for the UK supply chain, logistics and shipping industries.

Two topics commanded the most airtime; how technology and innovation is bringing rapid change. And, unsurprisingly, the Brexit elephant, an ever-present in the room.

Visiting the show, CMF Capital's Managing Director John Mulheron spoke at length with businesses about the impact technology is having within the supply chain and logistics sector is rapidly advancing. From an increased use of robotics within warehousing, to the shift in fleets of vehicles that run on clean energy which, the industry has recognising through substantial and ongoing investment.

"UK's supply chain is planning on investing £225million over the next three years, according to research from Society of Motor Manufacturers and Traders (SMMT). In a survey, last year to over 100 supply chain leaders it revealed 94% plan to invest substantially in their businesses over the next three years. That quarter of a billion figure also only a snapshot of the total market and only includes investment from the UK." Commented John Mulheron.

With the bulk of investment expected to contribute towards skills and recruitment, plant machinery or tooling and product development. Research also cited a greater ambition to export, but given the uncertainties of Brexit, particularly access to a tariff-free Europe and the customs union there naturally comes an air of caution.

However, business leader accept that whether the outcome is a soft or hard Brexit, there is a greater need to look at how technology can make the industry sectors more competitive and more productive.

Warehousing for example will completely change over the next decade with increased automation and robotics replacing humans. As consumers change the way they shop, industry has to adapt to keep pace with 'on demand' lifestyles where goods are expected to be 'clicked, delivered and increasing then collected' across the UK.

Recent reports have indicated that a number of Chinese businesses are investing in UK warehouses due to an increase in e-commerce activity.

"Chinese exports make up 70% of the UK's e-commerce market and by having a greater presence in the UK costs are driven down, but having several football pitches worth of storage, shipping items to people's homes becomes more efficient."

"Chinese companies aren't the only ones that have noticed the surge in foreign companies snapping up UK warehouses. Earlier in the year Australian retailer Bunnings opened its first UK warehouse as part of a £500m investment. This is a trend I think we will see continue, driven by the likes of Amazon, Next or even expecting a freshly cooked Michelin starred meal to arrive in an instant the whole process from purchase to customer contact is changing." Noted John Mulheron.

Another factor reshaping warehousing is 3D printing and the benefits for manufacturers are vast. From creating prototypes or bespoke products in a fraction of the time or cost. Tooling or moulding costs would tumble and you could export a product digitally by sending the digital coded blueprint into production to anywhere in the world.

The pending arrival of driverless vehicles also dominated discussion with a number of show attendees. With government investment infrastructure and the likes of Nissan, there is a race amongst automotive manufacturers to fully master the technology that will see a very different haulage industry.

It's not only who might (or might not be) driving a vehicle, but also what it runs on. Diesel is being driven into the ground and electric vehicles, supported by advances in battery technology now mean longer journey's supported by growing network of charging points. Even the iconic London Black Taxi is due to run on clean energy within a few years.

"Producers face a broader range of possible outcomes as they are more dependent on the nature of the UK's future trade agreements with the EU. The outlook will depend on the balance between the negative effects of trade tariffs and the benefits of opening up trade with the rest of the world." Continue the CMF Capital Managing Director.

"The speed with which deals can be negotiated, and the extent of new trade, will be of vital importance. The global marketplace is growing quicker than the EU and with brave thinking, combined with the right funding solutions, it is an opportunity that we need to grasp. We stand ready with access to a panel of willing funders to help UK businesses make the transition." Concluded John Mulheron.