After three years of heightened trading conditions and untold pressures on the supply chain caused by the global pandemic, business group Logistics UK’s annual Logistics Report (released today 13 June 2023) shows that recovery is starting to be seen across the sector.
The report – the business group’s market-leading overview of the sector – reveals that, according to the latest available data (for 2021), logistics businesses added £163 billion to the UK economy and generated just over £1 trillion in revenues; a 19.2% increase on the previous year and the same as in 2019, and a welcome sign of recovery from Covid-19.
Despite this, 2022 remained a challenging year as Chief Executive of Logistics UK, David Wells, explains: “While the initial months of 2022 witnessed a resurgence in consumer spending and increased business activity, in the second half of the year the logistics sector navigated a difficult economic climate due to a global energy price shock – triggered by the Russian invasion of Ukraine – in addition to changing trade processes driven by Britain’s exit from the EU and the increasing need to decarbonise.
“Nevertheless, our industry continued to demonstrate its adaptability with the UK trading £414 billion exports and £644 billion imports in 2022. The outlook for overall business performance continues to be encouraging with 77% of survey respondents noting the same or better economic expectations for 2023 compared to 2022.”
The report highlights further challenges remain for the sector, particularly decarbonisation and the impact of inflation and the cost of living crisis.
Mr Wells continues: “Transport remained the highest greenhouse gas (GHG)-emitting sector across the UK in 2022, with industry calling for reform and investment across a host of policy areas. Our sector is embracing the challenge of decarbonisation, with almost all respondents (93.7%) reporting they will invest either the same as last year, or more, in alternative fuels in 2023.
“However, there is still an urgent need for investment and innovation to reduce GHG emissions at the pace and scale necessary to meet net zero targets. And with inflationary pressures continuing to affect prices across the economy, the current turbulent business conditions look set to continue in the next twelve months.”
In 2021, logistics businesses added £163bn to the UK economy and generated just over £1tn in revenues, a 19.2% increase on the previous year and the same as 2019. The logistics industry in the UK comprises 227,000 logistics enterprises, directly employing 1.8 million people across England, Wales, Scotland, and Northern Ireland. This is in addition to the 890,000 people employed in logistics roles in non-logistics businesses, meaning there are 2.7 million people employed in logistics overall.
However, the UK’s competitiveness in logistics has declined, according to the World Bank’s 2023 Logistics Performance Index (LPI) report. The UK was ranked 19th on the performance indicator, a significant drop compared to the average placement of 6th between 2012 and 2018. The fall in ranking from 2018 to 2023 is associated with Brexit-related changes that contributed to a decline in on-time shipments and efficient customs processes, as well as challenges in tracking shipments.
The Logistics Report 2023 uses in depth analysis of the latest official national statistics, as well as data collected by Logistics UK’s Industry Survey to provide oversight and analysis of the issues which have shaped the industry over the past year. To view the report, please visit: www.logistics.org.uk/research-hub/reports/logistics-report
