High

Road Freight, Logistics and Post

Consumer habits and technology advances are resulting in dynamic operational and strategic change across the sector.

Sector trends & challenges

  • Adoption of new technologies

    With demand flourishing, new technologies are being intertwined at an increasing pace, the use of which can improve fuel consumption, reduce crash frequency, and help preserve the quality of goods in transit.

  • Environmental regulation

    Environmental regulation means improving transport emissions is now a necessity. The British government published their UK Energy White Paper in December 2020 resulting in the need for businesses to phase in hybrid and EVs.

  • Aging workforces

    Brexit, and a reduction in available EU workers, is exacerbating the issue of ageing workforces. However this presents an opportunity for those companies who can adapt and attract a new generation of workers.

Sector rating profile

Road Freight, Logistics and Postal Services

The UK Logistics industry has been on an upward trend since before the COVID-19 pandemic began. However behavioural changes caused by the pandemic have driven growth even further, with the Office for National Statistics (ONS) stating that internet shopping in the latter part of 2020 contributed 26.1% of all retail sales, up from 18.1% in 2019. We expect the Logistics industry to continue to prosper even after the Covid-19 restrictions end, but there are dynamic challenges that companies must address.

Short term issues include an increase in costs which may not be recoverable from customers, very high demand for warehousing resulting in space being sold at a premium, and Brexit causing additional bureaucratic complexity. There are however opportunities for operator consolidation in order to reduce costs and environmental footprint, for example by using mixed-use solutions and improving ‘last mile’ efficiency. In addition, logistics companies can use new technologies to become more elastic in dealing with seasonal variations or environmental events. We expect to see new technologies appearing in the industry on a regular basis as businesses seek to capitalise on growth opportunities by overcoming the difficult challenges faced.

Recent Environmental regulation means improving transport emissions is no longer a nice-to-have but a must. For example, central London will soon have the world’s first Ultra Low Emission Zone (ULEZ) and Clean Air Zones (CAZs) are to launch in Birmingham and Bath this year, and we expect other cities will follow suit. Logistics fleets will have to make short term plans such as fitting abatement technology to purify emissions. The British government published their UK Energy White Paper in December 2020 which highlights emissions targets up to 2050, resulting in the need for transport businesses needing longer term plans to phase in hybrid and electric vehicles.

Recent HGV driver shortages are starting to create a real problem for the UK economy. Logistics companies are struggling to find enough drivers to fulfil their increasingly busy workloads, but the impact on end users is even more pronounced. Consequently, the UK government has created 5,000 new temporary visas for HGV drivers wanting to work in the UK, in addition to 4,000 places on new HGV training courses. It is however likely that the issues will remain at least in the short-term.

Find Your Expert

David Pike is Interpath Lead for the Transport & Logistics sector, which includes Road Freight, Logistics and Post as one of four core segments. Phil Lyons leads our approach to this sector nationally with wider support from Kenny McKay. For a full list of our senior people with experience in the sector use the button below.

Our senior team