Transport & Logistics

Road Freight, Logistics and Post

Deals Activity: Moderate

Restructuring Activity: Moderate

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

Deals activity in Road Freight, Logistics and Post

1. The sector continues to see deal activity at or around pre-pandemic levels.

2. There has been increased PE interest in the logistics sector, both from a real estate and operational perspective.

Restructuring activity in Road Freight, Logistics and Post

The logistics sector has lost some momentum in the post-pandemic economic environment, as weakening consumer and investor sentiment has tempered demand for logistics capacity.

Road freight continues to be pressured by increases in costs, though many of these have been successfully passed through to the end customer.

Post volumes continue to decline, making it harder to maintain economically viable operations across much of the UK.

Road Freight, Logistics and Postal Services

The logistics sector fulfilled a vital economic and societal function during the pandemic, transporting goods, packages and post in exceptionally challenging circumstances.

A shortage of HGV drivers has been an acute issue for the industry, with a knock-on effect for other sectors. While progress on labour availability has been made in recent months, sustaining recruit volumes will be challenging in the post-Brexit environment, driving up wage demands from an experienced but aging workforce.

Surging diesel prices, delays in vehicle deliveries and border bureaucracy have also driven up costs for logistics businesses. While much can be passed on to customers, remaining competitive to win new contracts or renewals requires tight cost control and mitigation.

New technologies can be used to manage seasonal variations in demand more effectively. 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.

Looking ahead, we're likely to see further change as environmental issues rise in importance. Recent environmental regulation means improving transport emissions is now a must. London has claimed a world first with its Ultra Low Emission Zone (ULEZ), and further Clean Air Zones (CAZs) are being pursued in Birmingham, Bath and elsewhere. Logistics fleets will have to make urgent investment in hybrid and electric vehicles to ensure compliance with regulation and to continue to win contracts with customers focused on supply chain sustainability.

The challenges are likely to create opportunities for consolidation as operators seek to reduce costs and environmental footprint.

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