UK Industrial Strategy shows that logistics is still an afterthought


The British Government has published a programme it describes as an ‘industrial strategy’. It has a lot of common sense policies, although they do not really add up to the sort of thing that would be described as a strategy for a business. Although it is a superior example of such ideas there is not a huge amount to be interested in for those outside of the UK.

However, for anyone interested in the role of logistics in advanced economies it is interesting as much for what it leaves out as what is included.

There is a great deal of attention paid to areas such as education, particularly technical training, research & development in areas such as biotechnology and new automotive technologies. There is a great deal about ‘productivity’ yet it appears that many of the economists and journalists who talk about this are vague about its details.

However, when it comes to the specifics of the role of logistics there is little. The strategy document does talk about investment in connections between cities, the creation of infrastructure for autonomous vehicles and a “smart” power generation grid for electric vehicles. It also discusses the expansion of logistics infrastructure at Heathrow airport. This is all very impressive.

What is does not do is identify the specific role that the logistics sector has in a changing economy. New production systems will require new logistics solutions, from better performing airports to better port connections. The geography of warehousing is changing, particularly around large cities, and this has to be accommodated. There is no mention of this. Certainly, autonomous vehicles offer the potential for greater productivity in road transport, but this is approached as an issue for engineering R&D. There is little application of these ideas, for example, for the utilisation of rail or road infrastructure around ports. 

Governments are not very good at planning. They are slow and they are in no position to understand markets. However, they are in a position to affect economic change by permitting the building of logistics assets that will in themselves drive economic growth. Possibly the Government of Singapore understands this but there appear few other governments that do. Politicians, journalists, civil servants and economists around the world think that the productive capacity of any economy is determined by what goes on inside factories and possibly research laboratories. Few think that logistics is really important and the British Government’s ‘Industrial Strategy’ is an example of this.

Source: Transport Intelligence, November 28, 2017

Author: Thomas Cullen

GSCi

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