January 31st, 2023

UK Logistics Industry Trends in 2023

Discover groundbreaking trends in the UK logistics industry. Get your business ahead of the competition with insights on cutting-edge logistics strategies for 2023.

The Current State of the Industry

The UK logistics industry is constantly changing, and businesses must stay updated on the latest trends. From warehouse automation to innovations in transportation technology, get the insights you need to stay ahead of the competition with groundbreaking strategies for your supply chain operations.

But first, it is essential to note that, like many other industries, the global logistics industry is still recovering from the COVID-19 pandemic as reported in our initial logistics industry study back in 2020. Let’s look briefly at how the situation has evolved before examining how best we can move forward.

Impact of the COVID-19 Pandemic on the Global Logistics Industry

Logistics companies are a vital part of value chains both within and beyond international borders. Logistic companies support trade and commerce and assist businesses in getting their products to customers. As a result, supply chain interruptions induced by the pandemic impacted competitiveness, economic growth, and job creation.

Whether we are talking maritime shipping, reduced capacity for container shipping, or transportation personnel, the pandemic changed the course of the global logistics industry. There were disruptions in supply chain management and logistics management. There were also confusing new rules and restrictions and tumultuous shifts in customer demand.

During the lockdown, land transport played a crucial part in keeping the country running. This required logistics businesses to meet the rising demand and cope with various problems while maintaining their workforce’s safety procedures.

With the lockdown over and Brexit now in full swing, the supply chain and the logistics industry keep moving forward. Every logistics manager is currently focused on the trends for the year ahead to set up more competent inventory management.

Every logistic manager is preparing for business logistics and new technologies that will improve and lead to effective transportation and supply chain management. Plus, how to control the system better so the products can get to the end customer. This is why we have worked on this valuable information for every logistics company in need.

What You Should Expect from the Logistics Industry in 2023

Because of the immense problems that the Covid-19 pandemic brought, production, supply chain management, and logistic management have been negatively impacted. They were many disruptions across the global logistics industry and supply chain management. For instance, production plants’ were temporarily closed, and there was a shortage of medical equipment and essential items like food.

However, as the world has moved on from the pandemic, in 2023, we expect the UK logistics industry – even the global logistics market to shift towards more sustainability-focused technologies and practices.

This includes investments in green energy, cleaner transportation options, better working conditions for logistics staff, and improved goods tracking systems.

Companies will also embrace automation technology. This is to become more efficient and reduce their environmental impact – such as smart warehouses that use robotics to pick and pack goods.

Use of Automation and Robotics in Warehousing

As demand for fast delivery rises, companies are increasingly investing in automation technology to improve efficiency. Automation and robotics can handle laborious, repetitive tasks quickly and accurately, leaving workers to focus on other operations.

Automated robots could handle loading/unloading, box packing/unpacking, palletising/depalletising, and pick/pack operations with advancing SaaS software innovation. This would also help reduce the strain of COVID-19 restrictions on warehouse staff at a time when many facilities are operating at maximum capacity.

Already, many warehouse procedures are becoming more efficient as technology augments the work of humans.

Warehouse automation can take numerous forms, including equipment and robots that assist humans with inventory processes from when it arrives at the warehouse until it leaves.

Using warehouse automation systems can assist warehouses in increasing production and accuracy, lowering labour costs, and improving safety.

Increase in Multi-modal Logistics Solutions

With an increase in local delivery, same-day deliveries, and international exports, the UK logistics industry will likely embrace multi-modal solutions. This would allow companies to choose from a combination of transportation services – land, sea, air, or rail – and different types of vehicles to transport goods between various points.

Multi-modal transport uses several means of transportation to convey goods to their final destination. These can be land or maritime means. The goal is to reduce transit costs and delivery lead times.

Multi-modal solutions offer improved cost efficiency, greater flexibility, and faster transit so businesses can meet customer demands quicker than ever.

It is important to note that multi-modal transport entails simply altering the shipping method and not handling the goods. For example, suppose the items are transported in a particular container in intermodal transportation. The shipment process will change in that case, but the container will remain the same.

Multi-modal transport has several advantages that make it one of the most widely utilized systems in the world. These advantages are as follows:

• It reduces congestion in seaports caused by a chain of ships and small vessels.
• It reduces the expense of monitoring products and greater security in tax collection.
• It reduces customs costs while controlling smuggling.
• It reduces import prices.
• It improves national product competitiveness in the international market.
• It allows for activity scheduling and compensation goods control.
• It increases cargo transportation efficiency.
• It saves money on transportation.
• It lowers the possibility of loss due to theft or looting.

Collaboration Between Digital Platforms and Logistic Companies

The logistics industry will likely increase its focus on collaboration between digital platforms and traditional logistics companies to improve the efficiency of logistics operations.

This could mean that in 2023, we’ll see a surge in collaborations between digital networks and existing logistic companies.

The logistics industry will use technology such as automated Artificial Intelligence (AI) Systems or Blockchain solutions to increase the security, efficiency, and reliability of all tracking and data management forms.

By leveraging technology, logistics companies in the UK can increase their viability and achieve tremendous success through better communication and collaboration within the supply chain.

Technology is used in digital logistics to coordinate and regulate the transportation of commodities. Digital logistics has numerous advantages, including:

• An increased capability of measuring and meeting supply and demand
• Several possibilities for increased efficiency
• Improved data centralization and analysis
• Task automation and simplification

According to Allied Market Research, the digital logistics market will develop at a 23% annual rate globally over the next few years. It began at USD 2.92 billion in 2020 and will grow to $22.9 billion by 2030. This represents more than 8% of the global logistics market, with 2023 serving as a watershed year for innovation and growth.

The increased importance of digital logistics may contribute to more industry consolidation, with companies aiming to enhance their technological capabilities.

Development of Smarter Logistics Infrastructure

As the logistics industry in the UK evolves, so is its infrastructure. With current sustainability trends, cost reduction, and improved access to services, new investments are being made into more innovative technologies to improve processes.

By 2023, we will see more specialized digital tools and increased adoption of artificial intelligence, the Internet of Things (IoT), and energy-efficient solutions. Such technological advancements could dramatically shift how organizations service their clients and manage their supply chains.

Shipping will resume its Normal Course

Following considerable disruption to shipping due to retail container shortages and delays in processing in UK ports, new ships are scheduled in 2023. Increasing ship capacity may result in lower container rates, making shipping more affordable.

According to Sea Intelligence, over half of the shipping industry’s congestion has been cleared, and the recovery rate is increasing. Assuming no further significant supply chain interruptions exist, we should be back to the ‘normal’ 2% capacity loss baseline by early 2023.

Sustainability

The effects of climate change have never been more visible, from plummeting River Thames water levels to record heat extremes in China and a sweltering summer across Europe. Supply networks may suffer climate disruption threats in 2023. Still, they also are obligated to address the situation through decarbonization and improved sustainability.

Consumers were becoming more aware of and worried about the impact of their shopping behaviours. They want to know how big their carbon footprint is and how they might lessen it. This is why the logistics industry has embedded sustainability into its strategy for 2023.

With this plan, the logistics industry intends to achieve some ambitious goals, such as achieving net zero greenhouse gas emissions by 2040.

Businesses that prioritize reducing emissions – both in logistics and day-to-day operations – and are upfront with customers about what this implies for them will benefit from increased brand loyalty. Every logistics company that endeavours to be environmentally and user-friendly with its rules will also contribute to the remarkable shift toward a more sustainable future.

Increasing last-mile delivery demands

According to the World Economic Forum, cities will accommodate 60% of the world’s population by 2030. By 2050, that figure will have risen to 70%. This urbanization suggests that ‘last-mile logistics’ will grow in importance, and so will inventory costs.

Transportation and the logistics industry must explore reducing congestion and pollution while meeting customers’ expectations for ‘now’ delivery timeframes.

Increased Supply Chain Visibility

A smooth supply chain is facilitated by visibility. Visibility is the ability to trace things from when they leave your supplier until when they arrive in your warehouse or is delivered to the end customer.

Digitalising the supply chain and applying new technology makes essential information more accessible, ensuring an efficient and stable supply chain.

While one piece of software will not provide total visibility, logistic companies can adopt many solutions based on their business needs.

For example, they may start by implementing demand forecasting and inventory management software. Later, such companies can link other relevant technologies like artificial intelligence, the Internet of Things, and machine learning as the company grows and more budget becomes available.

Connecting the various tools to their system provides access to more information at different supply chain stages. For example, one software transmits a delivery time to the ERP system, which the ERP then communicates to the inventory optimization program. This additional data allows the inventory optimization software to determine whether the company can still meet up with orders or if they are at risk of running out of stock.

Responding fast and maintaining customer service levels might give companies an advantage over those who aren’t prepared.

E-Commerce will Continue to Rise

Speed, convenience, virus-free surfing, and the trend of most people doing more stuff online will continue to drive increased online sales.

In the United States, 300 million internet shoppers are predicted by the end of 2023, accounting for a whopping 91% of the population! Higher online sales mean more demand for warehouses, transportation, deliveries, and everything else involved in getting the product from the screen into the hands of the customer.

This trend represents a massive potential for the transportation and logistics industry. Businesses that wish to stay up with demand must expand. Attracting, training, and retaining new people will become increasingly important as e-commerce grows.

Businesses must overcome labour shortages to capitalize on the opportunities presented by e-commerce. The industry already has an ageing workforce; only 9% of European freight drivers are 25 or younger. Poor image, a lack of clear career progression, and safety concerns are just a few challenges preventing organizations from attracting talent.

How These Changes Affect Other Industries

The logistics industry in the UK is one of the fastest expanding, having more than doubled since 2012 and adding 190,000 jobs between 2019 and 2021 alone.

As of the end of 2022, the industry employed over 2 million people in the UK, with the North West of England, Yorkshire and the Humber, East Midlands, West Midlands, East of England, and South East of England accounting for roughly 15% of total employment.

Much of the industry’s expansion is concentrated on high-priority areas for the government’s levelling-up strategy.

Logistics investment in storage, road, rail, sea and air transport directly adds to economic activity. It also generates many quality jobs, allowing thousands of people to pursue skilled vocations. But that is not why the logistics industry is essential to the UK’s economy. It is significant because the existence and efficiency of logistics are critical to any economic activity.

Items must be transported to effectively carry out farming, fishing, mining, manufacturing, and selling to the general public. You need logistics to import things to improve our level of living or export commodities to make money for the economy.

Logistics companies in the industries we deal with daily do not just exist for the sake of existing; it is always done to assist the rest of the economy. Anything that increases the cost of logistics or makes it more difficult or slower adds instability to the UK economy.

Similarly, anything we do to improve logistics in the UK has a direct positive influence on economic development, living costs, and the UK’s worldwide competitiveness.

Industries that rely on the UK logistics industry include:

• Agriculture, forestry, and mining: 36 billion tonne km a year
• Food and beverage products: 38 billion tonne-kilometres
• Machines: 10 billion tonne-kilometres per year
• Mail/parcels: 9 billion tonne-kilometres each year

Here are some of the main ones in more detail:

Food Distribution

The Logistics industry in the UK is one of the most prominent industries in the UK, supporting, shaping, and standing up for efficient logistics. Logistics service providers in many countries play this same role.

An adequate supply chain is vital to keep Britain trading. This supply chain directly impacts over seven million people employed in making, selling, and moving the goods that affect everyone everywhere.

In the global logistics market, transportation and logistics issues have hampered the transportation of commodities along the supply chain. Also, bad logistics management has played a part in this.

Different types of food are transported utilising various effective transport modes and loads, such as trucks, trains, or air freight.

With these changes and trends we are looking forward to in 2023, we can look forward to a steady flow of the food distribution network. This will lead to massive production of food items and increased supply.

With the help of technological innovation, AI, and automation, it will be easy to easily stock and pile the food while delivering or in stores and warehouses.

Hospitality and Events

The hospitality industry is an integral part of the entire world’s GDP. The global logistics industry plays a vital part in this.

In the UK, the hospitality industry contributes to the economy by being the 3rd most important employment sector. Due to the pandemic hospitality sector was reduced by 23.1% (Ali, 2020).

However, with the trend toward increasing last-mile delivery demands, the demand for non-essential items will significantly increase, thereby increasing the demand for hospitality/event management.

With the trend of using advanced technologies, the hospitality and events sector has a competitive advantage without breaking the value chains.

Pharmaceutical

Every logistics provider can relate to the increasing demand for essential items such as pharmaceuticals.

With the trend of new technologies in 2023, logistics managers can set up flawless logistics systems that can go a long way in creating a free delivery of the items to the end user, pharmacies, and hospitals.

Because of the increased use of technology such as telehealth, app-based ecosystem, and automated production process, contactless production and sales are already following the covid 19 pandemic guidelines.

Third-Party Logistics

Third-party logistics (3PL) is a company that provides logistics services to businesses for specific operations or manages their complete supply chain.

Roll Pallet UK works with leading third and fourth-party logistic companies. Roll Pallet supplies pallets and containers at the required time, even when their demand may increase due to stockpiling and growing demand for goods.

Judging by the projected increase in the UK government’s support policies for logistics companies, companies like RollPallet UK can help businesses and companies with issues with their logistics and transport facilities.

Final Thoughts on Logistics Industry Trends in 2023

Regardless of the uncertainty that may still lie ahead, it is critical to future-proof your business and adapt. These trends and an agile attitude will boost every business’s lifespan and attract repeat customers.

In 2023, the most pressing of the many customer requirements is quick delivery at a low cost while being conscious of their environmental impact. Any technology or method that assists your company in providing these critical services to your clients will be beneficial.

While it won’t be the “normal” we all know, evidence points to a better year for supply chains in 2023. According to the IMI’s September Logistics Managers’ Index, “September’s future expectations hint at normalization and a return to business as usual over the following year.”

How long would it take for this incremental progress to get the market back to normal? This same report specifies that we should look forward to March 2023, but with uncertainty higher than ever, this isn’t something any of us can bank on.

Need a Helping Hand with Your Logistics?

RollPallet UK is here to offer help to all logistics firms operating across Britain. We’re not dedicated logistics consultants but we have a wealth of experience in providing logistics and supply chain organisations with a critical operational component; roll pallets and stillage units which are available at the most affordable prices in Britain under our best price guarantee, helping you reduce costs.

Contact our sales team today and to discuss your needs with one of Britain’s most trusted logistics industry suppliers.