Logistics as a barometer for the economic climate

By on Aug 18, 2010

Logistics has long been hailed as the lifeblood of the economy, with the volume of imports and exports via air, sea and road reflecting on how well, or not, the economy is faring

Using the industry as a barometer to predict the rise and fall of the UK market is a measure thatHellmann Worldwide Logistics is using to predict future economic performance

According to Hellmann's commercial director Matthew Marriott, logistics as a gauge is only going to become more accurate

As an industry, the logistics sector has faced its share of trials and tribulations over the last few years This, alongside the growth of the trade deficit to £38 billion in May in goods and services, and the rise of exports by less than £01 billion (compared with a £07 billion rise in imports) indicates that there is a long way to go to change the economic business model

Currently, exports are a particular concern, with the potential of a knock-on effect of lower exports and greater imports leading to another unhealthy shift into negative figures for the UK economy

In terms of how logistics and the economy can be related, the international transport industry needs to be split into two: airfreight and ocean freight

The airfreight market is the first market to decline in a recession, and has the highest spend ratio area to the landed value of products exported or imported

Factory output levels and GDP data are following similar trends and showing a slowing down in the pace of growth

"Having been in the sector for 22 years and, potentially a little over cautious, what I have seen over the last few months makes me believe we could potentially enter into a stagnated economic period whereby the deficit cutting verses the private sector economic growth equals a slowing down in growth or even zero growth for a short period," says Marriott "Hence if our government makes the wrong decision we could see negative growth in the UK"

He continued: "The ability to plan for future economic performance should not be overlooked Dips in the economy can be used as periods to reflect on the service provided by businesses to ensure that levels of operational excellence and uncompromised customer service are the norm Peaks are the periods to then capitalise on these relationships and keep the economy flourishing"