Logistics in the UK: A Look to the Year Ahead

Business Services

When ordering items online, consumers are not always aware of the amount work that goes on behind bringing the product from a warehouse to their home. From packing the product, to loading into a truck, plane or ship, there is a lot of planning, or “logistics”, that goes behind making this possible. That is exactly what the logistics sector is responsible for, the transportation, storing and delivering of goods. In the UK specifically, the logistics sector is one of the leading sectors contributing to economic growth and jobs.

According to the 2023 Logistics Report Summary from Logistics UK, in 2021, the logistics sector added £163 billion to the UK economy and generated just over £1 trillion in revenues, which is a 19.2% increase on the previous year and the same as 2019.

Although a well-established industries with its revenues up, UK global competitiveness has been decreasing due to recent events. We will summarise the report and highlight key findings below.

Background: A Prominent Industry


UK logistics is multi-modal, covering different aspects of transport, such as a well-developed road network, extensive rail system, major ports and international airports. These forms of transportation are used extensively and, throughout 2022, the country moved 208 billion tonne-kilometres through warehouses to businesses and consumers by land, air and sea. As an island nation, international trade is particularly important to boost the economy, relying on the logistics industry to keep transport going. In 2022, the UK traded over £1 trillion in goods, consisting of £414 billion exports and £644 billion imports.


The logistics sector is prominent in the UK, with 227,000 businesses employing 1.8 million workers across England, Wales, Scotland, and Northern Ireland. A further 890,0000 people are employed in logistic roles in non-logistics businesses, totalling 2.7m people employed in logistics overall, making up 8.2% of the UK workforce.

This sector is particularly important for the South East as it holds the highest proportion of logistics employees in the UK at 12% of the workforce, nearly 50% higher than the UK average.



We can expect the sector to gain more importance as ecommerce continues to grow throughout the UK. 26.6% of retail sales were made online in 2022, compared to 19.2% before COVID-19, a trend we will continue to see rise.

Performance: A Chaotic Time

2022 was a chaotic year for this sector due to supply chain disruptions, increase in costs, and shortages in the workforce. Whilst the sector has shown resilience post-covid, Brexit, and cost of living crisis, these crucial stress points highlight where areas need to be improved.

According to the report, the second half of 2022 was impacted by high energy costs and inflation. The Logistics UK Industry Survey 2022/23 found the greatest deterioration in business performance was due to high fuel prices. Additionally, logistics businesses found issues with recruitment of skilled staff and a decline in trading arrangements with the EU.

The UK’s global competitiveness declined according to the World Bank’s 2023 Logistics Performance Index. This fall in competitiveness was due to Brexit-related changes that impacted on-time shipments and efficiency of customs processes and shipment tracking.

However, businesses remain optimistic. Overall, business performance was perceived to have improved by January 2023. 77% of survey respondents have the same or better economic expectations for 2023 compared to 2022. 29.3% of respondents expect their business to diversify in 2023 while 23.9% expect to consolidate their businesses to mitigate against difficult economic conditions.

Environmental Impact

Sustainability is becoming an important factor for businesses, consumers, and investors. As a sector focused on the movement of goods, businesses will have to learn to adapt greener practices. Transport remained the highest greenhouse gas (GHG) emitting sector across the UK in 2022, building a case for investment into net zero.

Advancements are being made in the electrification of vehicle fleets and railways, however, gaining adequate power supplies and accessing charge points infrastructure and energy supply remain a challenge. Just 38% of UK rail is electrified, which might sound surprising, yet these trains carry nearly 75% of all passengers, meaning most users may have skewed idea of the country’s progress. In terms of aviation, we saw the first commercially produced Sustainable Aviation Fuel (SAF) available last year, and more and more airlines are trying to foster a sustainable environment, although it is likely that aviation will likely remain one of the UK’s largest emitting sectors in 2050.

Future Outlook

According to the report, trends in the sector we can expect to see in the coming year include autonomous vehicles, vehicle connectivity and electrification – all demanding the development of novel technologies and investment to scale up and commercialise. Automation is growing within the sector, but at different rates. Supply chains are being transformed globally by the development of a more digital environment, with distribution systems becoming autonomous and connected.

Investment is needed across various parts of the sector, including the workforce, infrastructure and innovation.

An ageing workforce, further crippled by a reduction in EU workers, has caused labour gaps across the UK. Additionally, government announcements on delays to major infrastructure projects across road and rail networks is concerning for the sector, particularly as road congestion is an economic and environmental problem, costing the UK economy £9.5b in 2022.

Nonetheless, this sector has shown resilience even throughout the most chaotic of times, something investors are keen to take advantage of. If you want to get in touch about anything logistics related, don’t hesitate to do so. With the rapid demand in this space, this could be a good time to explore your options for raising funding or securing a valuable exit. Like always, if you have any interest, please reach out!

By Anusheh Khan on 31/01/2024