Essex Sector Skills Profile:

Logistics Sector Sector Definition: Logistics is the management of the flow of resources between the point of origin and the point of consumption in order to meet some requirements, for example, of customers or corporations. The resources managed in logistics can include physical items, such as food, materials, equipment, liquids, and staff, as well as abstract items, such as time, information, particles, and energy. The logistics of physical items usually involves the integration of information flow, material handling, production, packaging, inventory, transportation, warehousing, and often security.

1. Summary of the sector at UK, regional and local level

The sector is worth over £93bn nationally, employing 2.3 million people in 196,000 companies. Freight logistics companies are categorised as those that manage their own logistics system and on behalf of the owners of the cargo (often referred to as third party logistics providers or hauliers). The industry has suffered from major skills shortages, particularly HGV drivers though this has been less of an issue recently. This is an important sector for Essex - In Greater Essex, Ports and Logistics account for 2.3% of total jobs and major opportunities expected from the London Gateway predicted to create 12,000 new jobs (Thurrock). Major local employers include Southend Airport, Stansted Airport, and Tilbury Port and key locations are Thurrock, Southend, Stansted and Harwich. Essex has an increasingly skilled supply of labour that is well suited to the needs of Ports and Logistics. Essex’s ‘travel to work’ area has access to a potential pool of 758,700 workers with degree level qualifications or higher, and local further education and higher education providers

LOGISTICS

Employs over 35,000 people locally, in nearly 3,000 companies Employers Include: Port of Tilbury Ltd, Manchester Airport Group, DSV, Tilbury Container Services, Uniserve, DP World, Harwich International Port Limited, Stobart Air, Servisair Cargo

NATIONAL HEADLINES Worth over £93bn nationally, employing 2.3 million people in 196,000 companies

The industry has suffered from major skills shortages, particularly HGV drivers though this is improving

A survey of over 100 senior executives in the UK's logistics sector has identified a significant increase in confidence in growth throughout the first half of 2013

Lack of skilled entrants to the sector is seen as hindering its growth. The image of the sector is seen as a barrier

LOCAL AND REGIONAL HEADLINES In Greater Essex, Ports and Logistics account for 2.3% of total jobs and major opportunities expected from the London

Gateway predicted to create 12,000 new jobs (Thurrock).

Major local employers include Southend Airport, Stansted Airport, and Tilbury Port and key locations are Thurrock, Southend, Stansted and Harwich.

Vacancies are most prevalent in Thurrock, Southend and Uttlesford reflecting the presence of the Ports and Airports there. Current Essex vacancies include van drivers, transport & distribution assistants and LGV drivers

KEY DRIVERS FOR FUTURE EMPLOYMENT AND SKILLS Nationally, Working Futures III projects that 843,600 additional workers will be required to work in the sector by 2017

including managers, customer service positions and transport & machine operatives

The Driver Certificate of Professional Competence (CPC) legislation will have a massive impact on the Logistics Sector as over 300,000 professional drivers, in vehicles over 3.5 tonnes, are required to take the training in the next five years

Major developments including London Gateway, The Port of Tilbury, Harwich International Port, potential growth at Southend and Stansted Airport

Local companies cited future job roles in this sector including air worthiness apprenticeships and skills and drivers

FIVE KEY OPPORTUNITIES/CHALLENGES There are low numbers of learners on Logistics apprenticeships and not all relevant frameworks are offered locally (e.g.

supply chain management).

There is a lack of higher level training (Level 4+) available locally.

Employers have highlighted that the sector needs to be conveyed as a career of choice rather than something people ‘fall into’

Awareness of roles within logistics and aviation is lacking and needs to be reflected in careers information

Employers have fed back a growing need for leadership and management skills

THIS PROFILE WAS PRODUCED IN AUTUMN

2013 WITH LATEST AVAILABLE DATA AT THIS

TIME. IT IS INTENDED AS AN INTRODUCTION

ONLY.

FOR MORE DETAILED AND UPDATED INFO

PLEASE REFER TO THE WEB LINKS PROVIDED.

UP TO DATE SECTOR VACANCIES &

FEEDBACK WILL ALSO BE ADDED

ALONGSIDE ALL SECTOR PROFILES WHERE

AVAILABLE

are helping to provide employees with the specialist skills and knowledge the sector requires. In addition, the Chelmsford Campus of Anglia Ruskin University offers an MSc in International Logistics, and South Essex College offers a range of logistics skills training. Locally, the sector currently has an annual turnover of nearly £3billion. Kent has a similarly sized sector and is also the main competition for Essex currently. However, the strength of both Essex and Kent in ports and logistics means that the Thames Gateway has a substantial offer for businesses in this sector. There is a clustering of businesses within the Thames Gateway South Essex area and in Haven Gateway, particularly in Thurrock and Harwich and along the A120. There is also a cluster of companies around Stansted Airport. 1.1. Examples of job roles within the sector Air traffic controller Airline pilot Freight forwarder Warehouse supervisor 1.2. Major subsectors of logistics Warehousing & Distribution Traffic and Transportation Purchasing and procurement 1.3. Examples of companies locally CMA CGM (UK) SHIPPING LIMITED INCHCAPE SHIPPING SERVICES HOLDINGS LIMITED DSV ROAD LIMITED STOBART AIR PORT OF TILBURY LONDON LIMITED ASSURED CONTAINER SERVICES LIMITED WOODLAND GLOBAL LTD TILBURY CONTAINER SERVICES LIMITED MANCHESTER AIRPORT GROUP HARWICH INTERNATIONAL PORT

Transport planner Van driver Heavy goods vehicle driver Supply Chain Manager

Post worker Courier Logistics and distribution manager Transport Manager

1.4. Establishment and workforce concentration in the sector

Map overview of the workforce concentration in the Logistics sector in each ward within Essex, Southend-on-Sea and Thurrock

Figure 2: 2,955 individual businesses in Essex, Thurrock and Southend-on-Sea

(Source: ONS 2011)

Figure 3: 35,500 employees in Essex, Thurrock and Southend-on-Sea

(Source: Nomis 2011)

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100

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300

49 : Land transport andtransport via pipelines

50 : Water transport

51 : Air transport

52 : Warehousing andsupport activities fortransportation

53 : Postal and courieractivities

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1,000

1,500

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4,50049 : Land transportand transport viapipelines

50 : Water transport

51 : Air transport

52 : Warehousing andsupport activities fortransportation

53 : Postal andcourier activities

Figure 2 shows that the highest concentration of businesses in the Land Transport and Transport via Pipelines industry is in Thurrock (285 in 2011), which also means that the industry is the biggest in the county out of all the sector-related industries. These industry-related businesses also employed the highest number of people, 2,725 in 2011, although the majority of them were SMEs (average of 9 employees per business). The second largest industry is Warehousing and Support Activities for Transportation, which is also predominant in Thurrock: 140 businesses employed over 4,200 people in 2011, giving an average of 30 employees per establishment. Uttlesford has Air Transport as its predominant industry, mainly given the presence of Stansted Airport within the area. In 2011, 1,550 people were employed in 55 establishments. Water Transport industry is the most developed in Thurrock (15 businesses), however the highest workforce is in Tendring (200 employees). Postal and Courier Activities industry is predominant in Chelmsford, with 65 businesses registered in 2011 and approx. 1,440 people employed.

2. Course Provision in the county 2.1 Apprenticeship participation in the county (2011/2012 full academic year)

12

39

5 0

5

10

15

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45

Rail InfrastructureEngineering

Rail TransportEngineering

International Tradeand Logistics

Traffic Office Warehousing &Storage

(L2) Intermediate Level Apprenticeships (L3) Advanced Level Apprenticeships (L4+) Higher Apprenticeships

Figure 1: Apprenticeships – Participation Data (16-19)

Figure 1 - This graph covers the number of sector-related apprenticeships in the county. These numbers relate to participation (learners are only counted once). Note: For a more complete list of course providers and apprenticeships available, please visit http://www.i-essex.co.uk/ and http://www.apprenticeships.org.uk/

3. Vacancy and Salary trends 3.1. Current Salaries

Examples of starting salaries in the sector:

(Source: Prospects)

£0 £10,000 £20,000 £30,000 £40,000 £50,000 £60,000 £70,000 £80,000 £90,000

Van drivers

Road transport drivers

Bus and coach drivers

Postal workers, mail sorters, messengers and couriers

Air transport operatives

Large goods vehicle drivers

Managers and directors in transport and logistics

Marine and waterways transport operatives

Managers and directors in transport and distribution

Rail transport operatives

Train and tram drivers

Ship and hovercraft officers

Air traffic controllers

Aircraft pilots and flight engineers

Logistics and distribution manager -Range of typical starting salaries for new graduates: £15,000-£18,000. This will typically be at a lower level as some experience is usually required before reaching management positions. -With increased responsibility and management duties, salaries can range from £19,000-£22,000. Larger companies may pay more, especially on completion of training. It is common for graduates to earn double their starting salary after five years. -Range of salaries at middle to senior management level: £45,000-£60,000. There is potential to reach higher than this depending on budget, company size, specific role and ambition.

Airline pilot -The starting salary for a newly qualified first officer working for a small operation may be around £21,000. Starting salaries for those in larger companies are higher at around £22,000 - £24,000. -Salaries for more experienced pilots could range from £36,000 to £48,000 in a first officer role.

Transport Planner •Typical starting salaries range from £22,000 to £24,000. •Range of typical salaries at senior level/with experience, e.g. after 10-15 years in the role: £32,000 - £60,000. •Directors in consultancies may earn £60,000 - £100,000 or higher. Departmental directors in local authorities, who generally have broader responsibilities, such as engineering or environmental, may earn £70,000 - £80,000.

Freight Forwarder -The range of typical starting salaries is £17,000 to £25,000. -Those who have three to five years' experience can expect to earn £25,000 to 28,000. -Range of typical salaries at middle management level with experience is £30,000 to £35,000 and at senior management level is £35,000 to £45,000.

Figure 4: National Average Salaries

3.2. Vacancy concentrations in Essex, Thurrock and Southend-on-Sea (in the format of a graph)

Figure 5: Annual vacancy numbers in Logistics

(Source: Nomis, based on JobCentre Plus data only)

Figure 6: Total number of online vacancies advertised in the county between 03 April 2013 and 02 May 2013

(Source: Labour Insights 2013)

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2011 2012

0 20 40 60 80 100 120

Van drivers

Transport and distributionclerks & Assistants

Large goods vehicle drivers

Taxi, cab drivers & chauffeurs

Managers and directors intransport & distribution

JobCentre Plus Vacancy – Example 1:

Job Title: Van driver Location: Southend-on-Sea Salary: £6.70 - £10/hour Job Description: After recently winning a major contract with a large and well known Courier company based in Southend, we are URGENTLY looking for experienced Van drivers, there is over 50 positions available. This new contract will start immediately, you will be working for one of the fastest growing international companies in the region. THIS IS A PERMANENT POSITION. Job Requirements: -Have a full UK Manual licence with a maximum of 6 points (no bans acceptable) -Current valid passport and visa if non-EU or UK Resident, valid passport or full birth certificate with proof of N.I. Number -5 years complete work history with no gaps -Proof of address dated within the last 2 months that matches driving licence address -1 year minimum multi drop experience is a must -No fault accidents within the last 3 years

JobCentre Plus Vacancy – Example 2: Job Title: Air Freight Service Suprvisor Location: Colchester Salary: £24,000 - £30,000 Job Description: My client is looking for an existing operator to set up a new department. Job Requirements: -You must come from a logistics company and have global supply chain experience with both imports and exports. -You would ideally have worked in this role for a minimum of 5 years and have air freight and sea freight experience. -You must also have sound knowledge of IATA tact system. -Ideally you would have Dangerous goods by air, sea and road qualification and IATA Cargo Procedures/ DfT Regulated Agent level G -This is a very specialised role and would be a quick start

Generally, there were almost 4 times more vacancies in 2011 (approx. 8,000) than 2012 (2,200) in Essex (including Southend-on-Sea and Thurrock). At district level, this decrease in workforce demand has been mostly significant in Southend-on-Sea (1,200 vacancies in 2011, compared to only 74 in 2012), Uttlesford (1,200 vacancies in 2011; 65 in 2012) and Braintree (1,050 vacancies in 2011; 170 in 2012). In 2013, there have been more jobs in Transport and Storage (on average 90 vacancies advertised per month) than in Wholesale Trade/import-export (on average 30 vacancies advertised per month), according to JobCentre Plus. Regarding occupations, Transport Manager was the most in-demand job role within the sector and out of all sectors in Essex. On average, 500 adverts for this role have been recorded by JobCentre Plus in each month this year. Nevertheless, Labour Insights data shows that in one given month in 2013, only 13 Transport Manager roles have been advertised (data inconsistency – it will be addressed once we gain access to Labour Insights).

Please note that due to limited data sets, the numbers above do not include December vacancies for both years.

3.2.2. Skills/Qualifications/Experience required Figure 7: National Qualification Trends in Transport and Storage

(Source: CE/IER estimates based on ONS data (MDM revision 7146) cited in Working Futures 2010-2020 – Sectoral Report August 2012) 3.3. Skills Gaps and Shortages Skills lacking by sector and subsector

Nearly 1.5m people work in transport and logistics in the UK. But less than a quarter of these employees are female, according to the UK

Commission for Employment and Skills (UKCES). The logistics industry also suffers from poor perceptions of its career opportunities, which has

led to a debate around skills gaps and a lack of gender diversity.

4. Future growth The Driver CPC legislation will have a massive impact on the Logistics Sector as over 300,000 professional drivers, in vehicles over 3.5 tonnes, will be required to take the training in the next five years. (Source: UK SSA Report 2010) Essex employers have also suggested that there will be significant growth in specific areas of logistics including supply chain, warehousing, freight forwarding, green logistics, PortCentric logistics and international logistics.

4.1. Major developments

Major developments including The London Gateway, The Port of Tilbury, Harwich International Port and potential growth at London Southend and London Stansted Airports will have a major impact on the growth of the Logistics sector in Essex.

QFC = Qualifications and Credit Framework QFC 7-8 = Postgraduate level QFC 4-6 = Degree level or equivalent QFC 3 = Advanced QFC 2 = Intermediate QFC 1 = Foundation The occupational structure in Transport and Storage favours those qualified at intermediate and low level. Just over 45 per cent of employment was accounted for by those with intermediate qualifications (QCF2 and 3) in 2010 and this is expected to fall slightly by 2020. The share of those with higher qualifications (QCF4-8) is also expected to rise during the same period from just over 15 per cent to almost 25 per cent. On the other hand, those with low or no formal qualifications (QCF 0-1) are expected to fall from well over 35 per cent in 2010 to around 33 per cent by 2020.

4.2. Future trends in job roles and skills demands Working Futures III projects that 843,600 additional workers will be required to work in the sector by 2017. All occupational groups will experience a positive demand in employment. Considerable demand will be seen for managers (169,200), customer service positions (132,100) as well as for transport and machine operatives (107,600). 5. Case Study Located in the south of Essex, Southend Airport is a long-established regional airport and the eastern gateway to London, providing access to Europe and freight. Following major redevelopment there is a new passenger terminal, rail station and control tower with 70 European flights per week and European airfreight services. There is also collaboration with new London Gateway Port to offer PortCentric locations. An important local company (Olympus Keymed) has highlighted the importance of the airport stating that “Southend Airport is already extremely important to us. Having the attraction of not only the coastal location, but also an airport where people can fly to European destinations, would be a valuable differential.” Paul Hillman, managing director, Olympus KeyMed Group. There are plans to extend the runway by 300 metres, which will allow more business and leisure passengers to travel to Europe and North Africa. If approved, the airport will have capacity for 2 million passengers a year by 2020 (48,000 currently) and 400,000 business trips per year. There are further plans to expand the business park around the airport with 50 businesses already on site employing more than 1,300 people including ATC Lasham, ACL Aviation Support and ATR series of turboprop and the Boeing 737 series of jet aircraft.

Appendix

Useful Links:

Skills for Logistics (Sector Skills Council for the UK’s Freight Logistics Industry): http://www.skillsforlogistics.org/

National Apprenticeship Service (NAS): http://www.apprenticeships.org.uk/About-Us/National-Apprenticeship-Service.aspx

Prospects (The Official Graduate Careers Website): http://www.prospects.ac.uk/

National Careers Service: https://nationalcareersservice.direct.gov.uk/Pages/Home.aspx

Universal Jobmatch (Jobcentre Plus job search tool): https://www.gov.uk/jobsearch

Essex Ports and Airports

Essex is home to five world-class ports, each of which has particular strengths.

The Port of Tilbury is located in the south of the county of Essex in the UK. It is the largest deep water port on the

River Thames and is the principal port serving London. Tilbury handles over 12.5 million tonnes of cargo per year with

approximately 3,000 cargo ships accessing the port annually. Around 70% of the UK’s population is within a 100-mile

radius of the port. It handles 80% of London’s container traffic.

Harwich International Port is located in the east of the county of Essex in the UK. It is one of the UK’s leading multi-

purpose freight and passenger ports and offers first class facilities for container and bulk operations. Harwich handles

over 3.7 million tonnes of freight per year. The port is less than an hour from London and less than an hour from

London Stansted Airport.

London Gateway Port is located in the south of the county of Essex in the UK. The port is due for completion in the

fourth quarter of 2013 and is part of a £1.5 billion project to build the UK’s first 21st century major deep-sea container

port and Europe’s largest logistics park. The port is only 25 miles from the centre of London and close to key business

locations such as Thurrock, Basildon and Southend-on-Sea.

London Southend Airport is located in the south east of the county of Essex in the UK. It is a long-established regional

airport and is the eastern gateway to London, providing excellent access to Europe for business travellers and urgent

freight. The airport has a new passenger terminal, control tower, hotel and train station thanks to a multi-million

pound investment and development programme to enhance passenger and freight facilities.

London Stansted Airport is located in the west of the county of Essex in the UK. It is London’s third busiest airport

serving more than 18 million passengers each year, with access to more than 150 European destinations. Some 20

percent of passengers use London Stansted Airport for business travel and it is widely recognised as the most

convenient airport for companies based in Essex, London, the Cambridge cluster and the East of England.

(Source: M.E.L. Research & Mazars)