Transport, Storage and Communication
March 2008
Introduction
This broad sector encompasses a wide range of activities including direct conveyance of goods, passengers and information by a range of modes – road, rail, air, sea and inland waterway and pipeline by both public and private sector companies, together with indirect supporting and auxiliary services such as cargo handling, travel and tour arrangements, freight brokerage, storage and warehousing, the operation of terminals and parking facilities, etc. as well as postal/courier and telecommunication services (including internet access provision) and the renting of transport equipment with driver or operator.
Employment
Within the Lancashire sub-region the Transport, Storage and Communication industry provides about 28,000 jobs in some 2,470 business units of which 2,085 are separately registered VAT businesses. This employment base represents 4.6% of all the sub-region's employees, a share rather lower than the 5.9% nationally. The sector encompasses a high proportion of "blue collar" jobs and men account for 78% of the workforce. The number of women employed in the sector has decreased over recent years due largely to some rationalisation in the hitherto large tour operators sector. Around 87% of all jobs in the industry are full-time, a rate somewhat above the services industries average and more akin to manufacturing (Table 1).
| Employment Status | Employees | |
|---|---|---|
| No. | % | |
| Male full-time workers | 20,100 | 71.7 |
| Male part-time workers | 1,700 | 6.0 |
| Female full-time workers | 4,400 | 15.5 |
| Female part-time workers | 1,900 | 6.8 |
| Male workers | 21,800 | 77.7 |
| Female workers | 6,300 | 22.3 |
| Full-time workers | 24,500 | 87.3 |
| Part-time workers | 3,600 | 12.7 |
| Total | 28,000 | 100.0 |
| Source ONS - Annual Business Inquiry | ||
Geographically, Preston, at the hub of the transport and communications network, is the dominant centre where nearly a fifth of the total jobs are located with a further quarter spread between Lancaster and Blackburn (Figure 1). The sector's importance as a local employer varies somewhat between districts, accounting for over 6% of all jobs in Lancaster and Preston for example to less than 2% in Fylde District.
Statistically the average size of business unit in the sector at just 11 employees is quite small. However, whilst small establishments comprise the bulk of the local transport business units (three-quarters employ less than five people), the industry is also characterised by the presence of a number of larger organisations. Thus, whilst the 56 units with 100 or more employees comprise just 2.3% of all units, they employ 48% of the industry's employee workforce (Table 2). This feature is particularly notable within the communications sector, for example, where despite privatisation and de-regulation employment is still dominated by British Telecom and the Royal Mail spread across numerous separate sites. Within other sections of the industry are to be found firms like tour operator Gold Medal Travel, Althams Travel Services and coach/tour operator Fraser Eagle; the rail operators, including West Coast Trains and Northern Rail; P&O Ferrymasters operating from Fleetwood and Norfolk Line from Heysham. Courier/road haulage companies include many major players like TNT, Excel Lynx Express and DHL as well as a number of other major local road freight logistics firms such as Preston-based Montgomery Transport Ltd, Fagan & Whalley Ltd of Burnley, and Accrington-based Hargreaves Transport Services. Numerous public transport operators provide wide range of local scheduled bus services across the county including Stagecoach Group and local groups like Preston Bus, Lancashire United, Rossendale Transport and others. As well as the two local ports and Blackpool Airport, Lancashire companies also have ready access both to Manchester International Airport and Liverpool John Lennon Airport as well as the Port of Liverpool.
| Employee Size Band | Establishments | Employees | ||
|---|---|---|---|---|
| No. | % | No. | % | |
| 1-4 | 1,816 | 73.6 | 3,300 | 11.7 |
| 5-10 | 295 | 12.0 | 2,100 | 7.4 |
| 11-24 | 168 | 6.8 | 2,700 | 9.6 |
| 25-49 | 72 | 2.9 | 2,600 | 9.2 |
| 50-99 | 59 | 2.4 | 4,100 | 14.6 |
| 100-199 | 32 | 1.3 | 4,500 | 15.9 |
| 200+ | 24 | 1.0 | 8,900 | 31.6 |
| Total | 2,466 | 100.0 | 28,000 | 100.0 |
| Source ONS - Annual Business Inquiry | ||||
The distribution of the industry's jobs across the whole of the Lancashire sub-region by Lower Layer Super Output Areas (LSOAs) are shown in Figure 3. Because of the wide range of activities encompassed under "Transport, Storage & Communication", providing services for all sectors of industry as well as for consumers, there are few clear concentrations. Some activities (e.g. ports) have fixed locations and some (e.g. courier services) have a need for good accessibility to the road network. Relatively few activities are demanding of a central urban location, even if they provide services there (e.g. public transport) so the bulk of employee jobs tend to be located in off-centre or peripheral urban locations and in rural areas where land costs for activities such as road haulage and storage are much lower.
Employment Change
The industry has endured a long period of steady employment decline, particularly among blue-collar workers in some of the larger transport sectors (Figure 4). In 1950 more than 40,000 people were working in transport and communication (including 11,000 in railways and another 11,000 in road passenger transport), both of which steadily gave way to the growth in private car ownership over post-war years and the increased use of roads for freight transport.
It has only been over the past couple of decades that this long-term trend has partly stabilised and in some sectors has been reversed (Table 2). Thus, between 1991 and 2006 employee job numbers grew by about 4,800 or by about a fifth. Some individual sectors continued to shed jobs, notably railways, scheduled passenger land transport and storage and warehousing but there were offsetting gains particularly in freight transport by road, in both postal and telecommunication services (including growth in both private couriers, cable communications and internet provision) but especially in transport support services including travel agents/tour operators, the latter linked especially with the rapid growth of MyTravel and Gold Medal Travel. Re-organisations in this latter sector, notably a transfer of headquarter operations away from Lancashire proper was largely responsible for local volatility in employee job number trends over recent years together with some rationalisation in the telecommunications sector
| Land Transport | Water and Air Transport | Support Transport | Post and Telecoms | Total | |
|---|---|---|---|---|---|
| 1991 | 11,200 | 300 | 3,900 | 8,000 | 23,300 |
| 1993 | 11,100 | 300 | 5,400 | 7,400 | 24,100 |
| 1995 | 11,500 | 300 | 5,900 | 7,800 | 25,500 |
| 1996 | 11,600 | 200 | 5,000 | 9,500 | 26,300 |
| 1997 | 11,200 | 400 | 5,500 | 9,400 | 26,500 |
| 1998 | 11,000 | 300 | 6,000 | 9,500 | 26,800 |
| 1999 | 10,200 | 300 | 6,000 | 9,800 | 26,300 |
| 2000 | 10,400 | 200 | 6,000 | 9,200 | 25,600 |
| 2001 | 10,800 | 300 | 4,800 | 8,800 | 24,600 |
| 2002 | 10,900 | 100 | 5,700 | 11,600 | 28,200 |
| 2003 | 11,000 | 200 | 5,800 | 10,100 | 27,100 |
| 2004 | 11,300 | 300 | 5,600 | 9,100 | 26,400 |
| 2005 | 11,000 | 300 | 5,000 | 8,200 | 24,400 |
| 2006 | 12,700 | 400 | 7,000 | 8,000 | 28,000 |
| Source ONS - Annual Employment Survey/Annual Business Inquiry | |||||
In line with the employment gains the size of the VAT-registered transport and communication business stock in Lancashire has also shown an increase over the past decade and more amounting to 19.5% between 1994 and 2007, although this was slightly less than the rate of increase enjoyed nationally (+21.2%). New business formation rates in the sector, whilst on an upward trend, have, until recently, lagged those in the UK though in common with many other local industries, business survival rates have generally been higher than those nationally (Figure 5).
General Characteristics
The total output of the UK transport and communication sector was estimated to be worth some £221bn at current prices in 2006 generating nearly £86bn in gross value added. Postal services and telecommunications were responsible for about 40% of this sum. The transport industry is clearly a vital part of the economy, being regarded as an "enabling sector" and can potentially contribute to or detract from wider business competitiveness considerably. Accordingly, it is often regarded as a key priority for public sector capital investment. It contributes to the whole production process from input to final consumer delivery. Its growth is linked closely to the business cycle as well as to factors like structural change in manufacturing, changes in life styles and the liberalisation of markets. The relocation of manufacturing (usually to non-urban areas), for example, and the dispersal of economic activity generally has had a concomitant effect on both freight and passenger movements. The rapid growth in many of the service sectors too has multiplied the demands for mobility and communication. The demand for different forms of transport, as well as being dependent on the overall state of the economy, is dependent on its price and service level and quality set against the availability and price of alternatives.
Large sections of the industry have been subject to rationalisation and restructuring over recent years in order to increase operating efficiencies and productivity. Privatisation and deregulation and generally increased competition within and between different modes have been significant factors across many sectors forcing operators to invest heavily in modern equipment. Progress in technology too has been considerable, including the application of new information and communication technologies, leading to new value added services.
The largest single commercial activity in the County is road haulage, proving employee jobs for nearly 7,400 people. This activity expanded rapidly over the late 1980s and 1990s, benefiting from the shift from rail to road, from out-sourcing practices to specialised companies and the trend towards just in time production and supply chain management as well as from the move towards more complex logistics and warehousing services. Increasingly, road hauliers are tending to use larger vehicles carrying heavier loads – 85% of UK traffic, in terms of tonne-kilometres, is now carried by vehicles of over 25 tonnes gross weight. A number have moved into custom-designed delivery systems catering to the demand for outsourcing of distribution from many companies. Structurally still a highly fragmented sector, it has suffered from major cost increases over recent years as well as from a degree of structural over-capacity that is only slowly being addressed.
Much of the transport sector is heavily reliant on government for infrastructure investment. One of the main issues now facing the transport and communications industry is growing congestion that is increasing cross-sectoral business costs and disadvantaging their competitiveness, in addition to limiting the possibilities of modal shifts. Increasingly, the government, both through fiscal and regulatory measures is seeking to balance congestion and shortfalls in the transport system with environmental constraints.
For further details, please contact:
Peter Kivell
Tel 01772 534157
Email Peter.Kivell@lancashire.gov.uk