Rising costs are fueling an uncertain future for the logistics industry. The sector is entering a new era at a time when world crises are still ongoing and have not been fully settled. We spoke to Lyall Cresswell, Founder & CEO of Transport Exchange Group, about what rising costs mean for the sector, the uncertain future and the ability of the industry to reinvent itself when faced with challenges.
‘All key elements are going up in price,’ Cresswell begins when asked how rising costs are affecting the logistics industry. A lot of the increase is caused by the uneven distribution of supply and demand. Coupled with the Covid-19 pandemic, which is still affecting supply chains worldwide, and the war in Ukraine, it is unlikely to see prices going down any time soon.
The UK has its own, specific conditions adding to costs and business challenges. Recent tax increases are also impacting overall consumer confidence, as well as manufacturing costs. Cresswell, however, is cautious to draw any conclusions given that the last two years were highly challenging. All economic predictions should take into account how Covid-19 disrupted global supply chains and the normal flow of goods.
Cresswell believes higher costs, including for wages, might not necessarily be a bad thing. It could make the industry more attractive and solve some of the problems with finding people. Of course, unsustainable levels would cause greater harm in the longer term.
‘We are going to continue seeing considerable inflation, especially at salaries, as we are still at historic lows as far as the market goes,’ Cresswell adds. The UK is also dealing with the labour market being disrupted by Brexit. In addition, the war in Ukraine is providing another reason to worry.
Transport Exchange Group, however, has not recorded any reduction in demand. One reason could be that consumers and businesses have not yet been fully affected by the cost of living.
You can watch the full interview with Lyall Cresswell, Founder & CEO of Transport Exchange Group, and learn more about what market conditions are causing change to the logistics industry, what can be done to make the sector more attractive and more.