Logistics UK has called for a public-private partnership to unlock investment and enable logistics to maximize the benefits it can deliver to the economy.
The logistics organization has released its latest report, highlighting key insights into the sector. It points out that in 2023, the UK’s total trade had mixed results: imports slightly decreased while exports increased significantly. Europe and the Mediterranean are the main regions for imports and exports, with North America and the Far East being important trade partners.
Positive freight outlook
The report highlights the road freight sector handles about 81.1% of domestic freight. Road freight activity peaked in 2021 but decreased in 2023, remaining higher than in 2019.
What about trends? There has been a shift from accompanied haulage across the Dover Straits to unaccompanied trailers across the North Sea.
Additionally, air freight activity for exports and imports showed a significant positive improvement between 2023 and 2024.
With recent industry challenges globally with ocean freight, shippers have opted for multi-modal services, and switched to air freight to get cargo to destinations in time.
What about EU exit complications? “Despite a slight decline in customs and border agency procedures post-EU exit, customs operations are generally efficient, benefiting from high compliance rates and improving logistics services,” reads the report.
Red Sea impact
The logistics and shipping world has dealt with a master challenge—the Red Sea crisis. The industry has been impacted significantly by reroutes, a race for alternatives, and rolling challenges in business operations. There is no end in sight to the maritime crisis just yet.
The Red Sea is a crucial corridor connecting the Mediterranean Sea, the Indian Ocean, and beyond. Its strategic location gives shippers access to Europe, Asia, and Africa. The Red Sea route is the natural sailing route between these regions.
How has the ongoing Red Sea crisis affected the logistics and shipping industry, particularly regarding journey times and costs?
“This diversion is adding at least 10 days to journeys and increasing shipping costs and therefore has directly impacted importers and exporters, as well as consumers,” says Logistic UK’s chief executive, David Wells.
The report finds temporary port congestion is expected when the Red Sea crisis ends, as ships passing through the Cape and those returning to the Suez Canal route will arrive in Northern Europe at the same time.
Temporary port congestion following the Red Sea crisis is a sentiment shared by Maersk CEO Vincent Clerc.
Supply chain resilience
UK Logistics’ report emphasizes that extreme weather events are disrupting transport networks and damaging infrastructure. The Department for Transport (DfT) reports that these impacts are ongoing and will worsen with climate change.
The report adds that the economic cost is high, with weather-related costs for Network Rail exceeding £3 billion over the past 15 years.
Added to this, the UK government recently formed the Critical Imports Council to safeguard the movement of critical goods. This follows recent supply chain “shocks” experienced by businesses.
What are the main challenges the logistics sector faces in reducing carbon emissions? The sector is working towards decarbonization but faces challenges like the high cost of low-carbon fuels and not enough grid capacity.
According to the logistics industry survey, 62.9% of respondents plan to invest the same amount in alternative fuels in 2024 as they did last year, while 28.8% plan to invest more.
NOW READ: DHL Express empowers UK SMEs with customizable returns
Photo Credit: Canva
Share this article
About the author
Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.
