Survey results released this week from the Chartered Institute of Logistics and Transport show that the majority of transport providers in the UK think that government spending should target economic growth and reduce congestion. They also show that making the best use of existing infrastructure is more important than building new capacity and that members are more favourably inclined to see spending on rail capacity rather than road.
A total of 1,244 CILT members were canvassed on the UK Government’s Comprehensive Spending Review, which is due out in October and will set out spending plans from 2011 to 2015.
With severe cuts being sought, a total of 75% of members, including freight and logistics representatives, identified “supporting economic growth” as one of their top priorities where government spending should be protected.
Maintaining and making the best use of the existing infrastructure was seen as a higher priority than building new capacity. Rail capacity and road maintenance also took precedence whilst new motorways and transport links to airports were amongst the lowest.
Only 24% of those surveyed said that significant Government resources should be directed towards increasing road capacity compared to 61% who supported available funds being directed towards rail; something of an issue for automotive freight movements in the UK which are in the majority moved by road.
Commenting on the survey, Sir Moir Lockhead, CILT President, said: “No-one likes to see the transport budget cut, but in the current conditions it's inevitable that savings are going to have to be made.”
The announcement of cuts to the transport budget comes at a time when road transport prices in Europe have risen sharply, an increase of 13.5% between the first and second financial quarters of the year according to market information produced by Transporean and Capgemini Consulting.
In their fourth Transport Market Monitor the companies reveal that the price increases could mean traditional long-term sourcing strategies don’t bring the expected financial benefits that logistics managers are aiming for.
Capgemini’s vice president of supply chain and logistics, Steve Wilson, said: “Increased transport costs from third party logistics firms will raise prices for firms shipping goods without a dedicated fleet…After years of falling costs, reduced capacity from third party shipping firms could see the price per tonne of goods shipped in the UK rise by as much as 4-6% by the end of the year.”