In 2011 Third Party Logistics Market Grows in the UK

Online, January 20, 2012 (Newswire.com) - Gross revenue for UK third-party logistics (3PL) service providers was expected to grow by 10% in 2011. It has approximately reached at the expected statistics. Third party logistics UK gross revenues have shown considerable improvements as compared to the market results of the previous years.

Net revenue from 1995 to 2010, on average, increased by 12.7% since the company began tracking the 3rd party logistics industry in 1995. From 2009 to 2010, the increase in 3PL net revenue was 4.7 times the rate of UK gross domestic product (GDP) growth. One driving factor of 3PL growth was world trade volumes which increased 12.4% for 2010.

Since logistics business has huge importance for the UK economy, it's quite essential to set targets and then strategically attain them. With numerous small firms and giant companies in the business, there is extreme competition out there. Consistent with on-going economic globalization, the international transportation management third party logistics segment led with 30.1% gross revenue and net revenue increases. Dedicated contract carriage followed at 13.1%.

Revenues and profitability increased in all four 3rd party logistics segments in 2010. Gross revenue increases ranged from 12.9% to 30.1% and were up 19.4% overall. Net revenues were up 13.2%. Net revenues are a better indicator of true business improvement since fuel related costs have minimal impact. Overall, net income increased 23.4% from 2009 levels.

With future aspirations and set goals, all the significant barriers need to be skilfully overcome. To add to the complications, the barriers are unlimited and still to be resolved. Apart from weather and network capability, productivity related problems prove to be really big. In the way of increasing productivity of the logistics sector, there lies the problem of holding on to potential workforce (including almost the whole hierarchy).

Moreover, the transportation aspect, sometimes, seems to disappoint. The problem of the lack of gas stations on trucking routs remains unresolved. However, the government plans to encourage electronic tolling technology so that free flow technology can be enabled and the overall performance be improved. Also, the introduction of sustainable logistics and commercial funding to it is a step worth appreciation.

Other steps like the improvement of longer term capacity, performance and strategic rail freight network are going to make real difference. It's satisfactory to know that the government is incessantly raising funds for these schemes to be implemented. The government plans to improve a number of key routs under strategic road network campaign. We can expect a much improved logistics approach in near future.