Logistics sector prepared for future growth

A new report published today (11 June 2024) by Logistics UK shows that the sector, which operates at the heart of all UK economic activity, is poised for economic recovery. The business group’s annual logistics report shows how the industry – which generates £1.3 trillion in annual revenues and contributes £185 billion to UK GVA – is cautiously optimistic about 2024 and beyond, and identifies areas where the sector can help accelerate the economy.

38% of respondents to Logistics UK’s Industry Survey expect the economy to improve in 2024 compared to 2023, but as CEO David Wells OBE explains, this year has been a year of consolidation rather than a shift towards growth.

Photo: Logistics in the UK

Chief Executive of Logistics UK, David Wells OBE said: “It is clear that our industry continues to operate in challenging conditions, but the report paints a picture of a sector that is consolidating and taking steps to prepare to take advantage of opportunities that will arise as the overall economic situation improves. Our sector’s contribution of £185 billion in gross value added in 2022 (the latest official figures available) is in line with the £160.2 billion figure for 2021 when other factors are taken into account, so it is too early to conclude that the economy is returning to growth.

“Contributing £185 billion to the UK economy as the sector grapples with global geopolitical instability, new trade processes, financial recession and supply chain pressures from changing climate conditions is a great achievement. This demonstrates the resourcefulness and adaptability of the sector to keep the UK trading and meeting the needs of both businesses and consumers.”

The report also includes the latest Logistics UK Business Performance Index, which shows that overall business confidence and investment levels remain stable and consistent through 2023. In particular, the sector reports extremely positive sentiment around the adoption of new technologies, reflecting the importance of continued innovation in the industry .

“Our sector is often at the forefront of adopting new transportation technologies,” Wells continued, “with new solutions helping businesses move away from repetitive tasks or eliminate access restrictions imposed in clean air zones. Logistics continues to innovate to be ready for the next challenge, and it is encouraging to see how willing our sector is to take on the challenges we face.”

Logistics remains one of the UK’s most important employers: in March 2023, there were 214,160 logistics companies operating in the UK, employing around 8% of the country’s workforce. However, according to the Logistics Report, job types are changing as automation and technology continue to improve, and statistics show that there has been a sectoral shift, with management and director roles in purchasing, transportation and distribution seeing significant growth.

David Wells continued: “For the next government, whoever is elected, there is a huge opportunity to build the sector’s stable foundations and create an operating environment that enables the industry to thrive and deliver economic growth for the benefit of the whole of the UK. Our sector is interconnected with so many aspects of society and business that we need senior representatives in government and we are urging all political parties, if elected in July, to appoint a special minister for logistics and supply chain. It is predicted that with the right investment, policy changes and the right partnership with government, the sector could deliver UK productivity increases of up to £7.9 billion a year by 2030.”

The Logistics Report provides a comprehensive benchmark for the industry, reflecting on the past year and identifying future trends and industry sentiment. It combines the latest official statistics, insights from industry experts and the results of Logistics UK’s industry survey of 500 of its members to gauge industry sentiment – details and a summary of the report can be found here: Logistics Report 2024