Freight Forwarding market recovery

Freight Forwarding market recovery

30.6.2021 | Forwarding

Freight Forwarding Market Recovery

Good news at last – the market is expected to grow by 11.6% this year.

Transport Intelligence’s (Ti) latest report, Global Freight Forwarding 2021, shows the post-Covid-19 global forwarding market is settling into its recovery phase after dramatic contractions in 2020.

However, market dynamics remain skewed with limited capacity available and sky-high freight rates presenting a challenging market for shippers and opportunities for forwarders to secure high margins.

The Global Freight Forwarding market contracted by 8.7 per cent in 2020, recording its worst year since the financial crisis as a result of the pandemic. The sea freight forwarding market contracted by 3.8 per cent in 2020, but air freight forwarding suffered worse with a decline of 12.3 per cent. However, the freight forwarding market is expected to bounce back strongly with a growth of 11.6 per cent in 2021 and a CAGR of 5 per cent from 2020-2025 as volumes recover.

The sea freight forwarding market is set to grow at 7.6 per cent in 2021 and at a CAGR of 4.5 per cent from 2020-2025. Growth in 2021 will largely be driven by the bounce back in volumes from 2020, particularly in Q2 2021 vs Q2 2020. Sea freight forwarding growth out to 2025 will be driven by the ongoing recovery in volumes, modal switches from air to sea and new trade agreements generating more trade.

Airfreight forwarding is set to grow at 14.9 per cent in 2021 and at a CAGR of 5.4 per cent from 2020-2025. Growth in 2021 is largely driven by a recovery of volumes from 2020 and very high freight rates. Longer-term growth out to 2025 will be driven by a recovery in global trade and strong growth in air freight intensive sectors like high tech, pharmaceuticals, and cross-border e-commerce.

The new report also shows that amid all the disruption to the air freight market the top 20 freight forwarders have significantly increased their share of overall volumes, from 65.05 per cent in 2019 to 74.89 per cent in 2020. The top 20 increased the air freight volumes they handled in 2020, despite market volumes declining by 12.50 per cent. Coupled with the high air freight rates that persisted through 2020, this led to a good year for large forwarders.

The sea freight market also saw volumes decline from 2019, with 9.95 per cent fewer containers handled in 2020. Nevertheless, capacity constraints and high freight rates enabled the top 20 forwarders to broadly maintain their revenues, even though they carried 7.49 per cent fewer containers than in 2019.

“A tumultuous 2020 saw major disruptions in supply chains the world over with the ability of forwarders’ to keep goods moving severely tested by shocks to supply and demand, carriers greatly reducing capacity, and congestion at logistics gateways, amongst other forces,” said Nick Bailey, Ti’s head of research. “Although the market saw one of the sharpest contractions in recent memory in real terms, sky-high rates resulted in record-breaking top-line performance for many forwarders. The pandemic also accelerated digitisation and digitalisation efforts across the market as speed, agility and responsiveness proved highly valuable capabilities during the crisis.”

Logistics UK calls for seasonal visas

Logistics UK calls for seasonal visas

30.6.2021 | Logistics

Logistics UK calls for seasonal visas

With 45,000 HGV tests outstanding at DVSA, could seasonal visas protect nation’s supply chain? 

Logistics UK is today pressing government to introduce a seasonal visa for European HGV drivers to protect the nation’s supply chain while the organisation catches up with this backlog.

“During the COVID-19 pandemic, understandably, all driving tests were suspended,” explains David Wells, the business group’s Chief Executive, “leaving a huge backlog of potential drivers wishing to enter the logistics industry. At the same time, 79,000 European logistics workers returned to their home countries – and this, combined with an existing shortage of HGV drivers more than 76,000 individuals[1] has meant that haulage firms are now struggling to recruit new drivers – a problem which will be exacerbated by summer holidays for those who have worked so tirelessly throughout the pandemic.

“The Government recently granted temporary visa status for agricultural workers to ensure that important crops are picked and made available for UK consumers. But without temporary visa status for the drivers to move this food to where it is needed, the supply chain will break down at the first hurdle. The two sectors work hand in hand and should be treated in the same way.

“Our members urgently need drivers to be available now while DVSA catches up with the backlog of outstanding driving tests: without this temporary cover, there is a very real risk to the availability of the food and other vital items on which we rely during the summer months.”

DVSA estimates that it can undertake 118,000 HGV driver tests in the remainder of 2021, but it will take months to catch up on the existing backlog of outstanding examinations. And, as Mr Wells explains, the industry also needs a boost from government to speed along the number of new recruits entering the market.

“Even before the loss of our EU workers, logistics was suffering from a chronic shortage of drivers. It takes time and money to train new recruits to be ready to enter our highly regulated industry, but with many people suffering the effects of the current economic downturn, this cost can be prohibitive. We need government to prioritise the implementation of funded training to open the industry up to as many people as possible, to counteract the long-term recruitment issues which logistics has faced for many years, and attract a new generation of drivers and other employees to the sector as older personnel retire and leave the industry.”

Logistics UK is one of the UK’s leading business groups, representing logistics businesses that are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With COVID-19, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group that represents the whole industry, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.

Maritime Transport launches intermodal link between West Midlands and London Gateway

Maritime Transport launches intermodal link between West Midlands and London Gateway

28.6.2021 | haulage

Maritime launches intermodal service

Total transport capacity of 87 TEU in each direction.

Maritime Transport Ltd. is pleased to announce a new rail freight service operated by long-standing partner, GB Railfreight (GBRf), connecting DP World London Gateway to Maritime’s intermodal freight terminal in Tamworth (BIFT).

The new flow, which aims to deliver freight users a secure, direct link to vital consumer and manufacturing regions in the West Midlands and south of England, commenced today (28th June 2021), and runs six days a week from Monday to Saturday with a total transport capacity of 87 TEU in each direction.

GBRf now operates eight intermodal services into Maritime’s rail terminals in Manchester, Wakefield, East Midlands Gateway, and BIFT, demonstrating both companies’ commitment to growth in the UK rail freight sector.

Additionally, the commencement of a new daily connection will result in a considerable reduction in CO2 emissions, saving over 4,000,000 road miles per year in an increasingly congested road network.

The acquisition of Roadways Container Logistics in 2014 saw Maritime acquire BIFT as part of the deal. Container throughput at the terminal has increased significantly over the years due to additional services, continued investment in state-of-the-art container handling equipment, and vastly improved turnaround times. In 2011, BIFT saw an average weekly volume of 1,000 containers, rising to 2,500 in 2020, and now boasts an average vehicle turnaround time of just 26 minutes. Businesses across the country directly benefit from five daily intermodal services at BIFT, connecting London Gateway, Southampton and Felixstowe to the Midlands, with a dedicated operational team of thirty on-site 24/7 to ensure the smooth running of each service. The latest investments at the facility include major civil works, crane refurbishments, and two new ESC450 straddle carriers supplied by Kalmar Ltd.

John Bailey, Managing Director – Intermodal and Terminals, Maritime Transport:

‘This new service is an important milestone in the expansion of our intermodal offering, and reflects our passion and commitment to opening up new routes to our intermodal customers with fast, reliable, and cost-effective end-to-end solutions. As we see high demand for regular intermodal services from BIFT to the major ports in the south, we look forward to working alongside GBRf and DP World London Gateway together with a service that offers enormous potential.’

John Smith, Managing Director, GB Railfreight:

‘Today’s announcement builds on our long-standing partnership with Maritime that spans several years. Together with the seven intermodal services we already operate for Maritime Transport, the extra capacity created by the BIFT to London Gateway flow reinforces the vital role rail freight is playing in delivering goods sustainably around the country.’

John Trenchard, UK Commercial and Supply Chain Director, DP World London Gateway:

‘Maritime’s third service into DP World’s smart logistics hub at London Gateway will enable more customers to benefit from fast, reliable, and flexible links to international supply chains and markets. We are uniquely placed to provide the right trading infrastructure and smart logistical solutions for our customers and are delighted to see Maritime expanding its intermodal service provision from its industry-leading terminal in Tamworth, which complements our own state-of-the-art terminal operations.’

For more information about Maritime Transport visit maritimetransport.com 

The Port of King’s Lynn sees timber volumes double

The Port of King’s Lynn sees timber volumes double

28.6.2021 | Ports

Port of King’s Lynn sees timber volumes double

Over 88,000 tonnes of timber handled in the first six months of 2021. 

 

Associated British Ports (ABP) has seen 2021 timber volumes double at the Port of King’s Lynn. Due to the increased UK demand for timber across construction, manufacturing, and DIY, such as home offices, decking, home and garden improvements.

Typically imported from Sweden, Finland and Latvia, over 88,800 tonnes of timber have been handled by ABP’s Port of King’s Lynn, which is more than twice the quantity received in the first half of 2020.

The port handles a diverse mix of imports and exports, including forest products, minerals, aggregates, fertilisers, scrap metal and various types of grain. Grain is both imported and exported, depending on the quality of both the UK and European harvests. However, rising timber volumes are estimated to continue to meet demand.

ABP is investing circa £1.25 million in new undercover storage provisions for forest products, a Dutch Barn storage facility, which will be finished later this year. Over the last few years, ABP has regularly made significant investments in the port infrastructure, completing the installation of new lock gates this year and investing over £3 million in a new crane and other equipment in 2017. ABP has also recently invested in surfacing improvements for timber, demolished redundant and time-expired warehousing, and replaced a number of pieces of handling equipment, as well as introducing new access control arrangements.

Kim Kennedy, Port Manager for King’s Lynn, Associated British Ports, said:

“We are delighted to be having the busiest year that we’ve had for some years. Everyone has been brilliant in their attitude of coming to work and adapting to the challenges and conditions of the last 15 months, completing the safe and ‘Covid-secure’ loading and discharging of approximately 200 ships during this period.”

Not only are timber volumes likely to continue, but if the predictions for warmer weather are correct, then the wheat harvest in the UK should mean that the port will far exceed the estimate of handling 450,000 tonnes of cargo for the year. Working tirelessly towards ABP’s mission of “Keeping Britain Trading”, the Port of King’s Lynn continues its commitment to support the recovery of the UK economy and the variety of industries in which ABP’s customers are involved.

Finance Act 2021 gets Royal Assent

Finance Act 2021 gets Royal Assent

28.6.2021 | Tax

Royal Assent of Finance Act 2021 granted

Andrew Diver, Head of Taxation at Beatons Group, delves into the detail to explore what is included in the Act. 

Finance Act 2021 has received Royal Assent a month early, bringing a range of measures into force – including the extended loss carry-back and the super-deduction.

This key piece of legislation, announced in the Budget in March, was not expected to become law until July but has now been approved by Her Majesty The Queen.

Here, Andrew Diver, Head of Taxation at Beatons Group, delves into the detail to explore what is included in the Act.

Super-deduction
This was another big announcement in the Chancellor’s March budget.

The super deduction is a tax break for firms, allowing them to deduct 130% of the costs of buying assets against their profits.

This can be anything from new machinery or plant to office furniture and computers.

The deduction aims to encourage companies to invest in the future and promote business growth across the country as the UK fully reopens.

Both the extended loss carry-back and the super deduction took effect from April 2021.

Loss carry-back
One of the other big-ticket items from Rishi Sunak’s March budget was the announcement of loss carry-back extension.

Previously, if a company ends up experiencing a net loss, it can choose to apply that loss to the previous year’s tax return.

The new Act will extend this to three years for accounting periods ending between April 1, 2020, and March 31, 2022.

This means a potentially higher rebate for the business and the chance to reinvest and get the company back on track.

What else is included?
The Finance Act 2021 also brings changes to off-payroll working, bringing in a targeted anti-avoidance rule where arrangements seek to escape the rules and the Plastic Packaging Tax.

It also strengthens sanctions for promotors of tax avoidance schemes and extends the temporary 5% reduced rate of VAT for the hospitality sector until September 30, 2021 – and a new temporary rate of 12.5% until March 2022.

However, this just scratches the surface of everything in the new Act. Full details can be found here.

If you need advice on how the Finance Act 2021 will affect you and your business, visit beatons.co.uk or call them on 01473 659777