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Business Continuity in the Transport & Logistics Sector

The transport & logistics sector is made up of companies in the planning, implementing, and controlling of the movement and storage of goods, services or information within a supply chain. These goods are transported between the points of origin and consumption via air, sea or surface transport (including road, rail and pedestrian).


Logistics enables efficient management of the supply chain by ensuring that goods or services are available where and when they are needed in good condition and at competitive prices. Whether logistics makes up part of your supply chain, or is your entire business, it is essential you consider Business Continuity Planning.

BC planning takes into account your suppliers and recognises organisations do not work in isolation. BC planning allows for workarounds and interim measures to be identified for suppliers and identify critical suppliers to ensure your ability to adapt in the face of a major disruption and have recovery functions in place to safeguard the survival of your business.

Competitive marketplace

It is undeniable that transport & logistics plays a huge role within today’s economy. In the age of online shopping, companies like Amazon, ASOS and even your local supermarket have flooded the market with goods that need transported quicker than ever to meet customer demand. This surge in demand has created a hugely profitable sector but also an extremely competitive one.

It is estimated that the UK Logistics & Posts Sector is worth 55 billion to the economy and comprises 5% of the UK GDP. The industry also employs 1.7m people.

So where can Business Continuity Planning fit in? It has been shown that companies that can prove they have assessed the risks of major disruptions to their business and have plans in place for recovery and align to resilience standards (ISO22301) are more likely to win contracts, gain lower insurance premiums and most importantly stay in business after a disruptive incident.

Threats and disruptions

All organisations need to have a plan in place in order to recover from incidents however the transport & logistics sector may be more at risk due to due to many global factors that could become a major disruption and escalate into a BC incident.

There are any number of daily challenges that could have a serious effect on your transport business. For example, road collisions, fuel costs, staffing, fire and floods. These combined with longer term challenges that effect the industry such as regulations (emissions controls, Brexit…etc), worker hours, increasing congestion and extreme weather can unexpectedly lead to experience a serious continuity incident that could cease operations if there is no recovery plan in place.

Examples

UK Weather – Beast from the east

The 2018 extreme weather incident in the UK known as ‘The beast from the east’ where freezing conditions and heavy snowfall caused a number of challenges and disruptions to the transport and logistics networks.

During the worst of the weather the following transport links were affected in unprecedented numbers:

  • Rail – All but 2 of the Rail Network Operators ceased operations.
  • Road - Up to 400 vehicles were trapped on the A1 and in Scotland, 300 people were stranded for 24 - 48 hours on snow-bound roads.
  • Air - Over 140 flights from Heathrow, Gatwick and London City airports were cancelled. Glasgow and Edinburgh airports closed.

This is an extreme case however, these extreme cases seem to be happening more frequently and if your business is not prepared, you put the future of your company and your staff at risk. How much would your business or your supply chain be affected with no movement of goods or staff for a 5+ day period? Could you continue to operate? Read our blog on how to get winter ready.

Government / Regulations - Brexit

The transport & logistics sector is one of the industries most affected by changes in international polices, regulations and trade agreements.

Brexit looks set to bring a vast number of challenges, for example if increased vehicle border inspections are brought in as a consequence of a hard or no-deal Brexit – it would greatly slow the distribution of goods into the UK. This, in turn may cause suppliers/customers to do business elsewhere resulting in loss of revenue.

The increasing driver shortage is another area which has been a concern for a number of years, and the impact of Brexit may well make matters worse. With fewer EU nationals choosing to move to the UK in light of the ongoing uncertainty about their future employment prospects, staffing levels will continue to drop.

Conclusion

So, in a time of rapid change, the ability to adapt will be crucial to ensure logistics companies remain cost-effective and efficient, as the industry continues to thrive.

There is no doubt the number or challenges the industry faces in terms of regulation and severe weather is going to continue to rise.

While organizations have invested millions of dollars in protecting IT systems, people and infrastructure, the question remains whether or not their BC plans will be effective should a disaster occur. Most often businesses don't go wrong in making plans but fall short when it comes to updating these plans as business, technology and threats themselves change.

So, you need to ask yourself, with every new business regulation and change to our climate, how will my business change? What do I need to do to create, update and maintain my business continuity plans so they are effective?

Posted on May 22, 2019

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