Time to kickstart growth 

THE GOVERNMENT will have been in power for six months on New Year’s Day, and after a period of learning and understanding the processes of government, Logistics UK believes that 2025 presents a significant opportunity to create a policy environment that allows our industry to thrive and support economic growth for the whole of the UK. With appropriate investment, incentives and the right partnerships with government, it is predicted that the sector could provide a boost of up to £7.9 billion per year to the UK’s GDP in productivity gains by 2030.

Logistics is one of the UK’s key foundational sectors and this must be reflected in the government’s forthcoming industrial, trade and infrastructure strategies. The “growth-driving sectors” identified by the government all depend on an efficient logistics sector and as the planned interventions start to get the economy back on track, it is imperative that the “track” is in the best condition possible. This means addressing logistics’ needs in reducing trade friction, improving infrastructure, ensuring a fair path to decarbonisation and ensuring the sector has the skilled workforce it needs now and in the future.

Smooth trade

2024 was a monumental year for changes to the UK’s borders, with new procedures implemented following Brexit, such as the Border Target Operating Model (BTOM) and Windsor Framework coming into effect, although the third phase of BTOM was postponed from October 2024 to January 2025. The EU’s new Entry/Exit System (EES) has also been delayed and is now expected to be introduced in May 2025. 

The constant changes to deadlines that we have seen in 2024 to new border operating systems cost the industry financially and erode confidence in both the government and our sector in terms of our ability to deliver for customers. Logistics operators need the support of the government to ensure that the UK’s borders do not become a barrier to the movement of goods and in the future, the government needs to provide clarity and the detail the industry needs to plan and adapt to meet these new trading requirements. 

National Freight Network

The previous government committed to working with the freight sector to develop a National Freight Network (NFN) and our members are keen to see this taken forwards. The NFN would help identify key investment priorities to help freight move more efficiently. We would also press for the new government to commit to 30-year infrastructure strategies that are implemented and held to account through five-year delivery plans. This would move us away from the current stop-start approach that sees much-needed projects take far too long to move from concept to delivery, holding our economy back. 

Decarbonisation

The logistics sector is embracing the challenge of achieving net zero, and a jointly developed sustainability and decarbonisation roadmap would enable the UK to become a world leader in logistics sustainability. The private sector needs confidence to invest in long-term infrastructure and requires a supportive, stable policy environment that incentivises decarbonisation. The government must recognise that logistics is comprised of multiple transport modes and infrastructure, meaning a variety of approaches will be needed to achieve a fair transition to net zero while keeping costs down for customers and supply chains resilient. 

Skills

The sector is still experiencing ongoing challenges with skills shortages in key roles, such as vehicle technicians, and it is critical that the government works with the sector to attract new talent into the profession. The Generation Logistics awareness campaign, a collaboration between government, Logistics UK, CILT (UK) and over 40 businesses across the sector, started in 2022 and after the first year had generated a 140% increase in individuals giving a positive score for the appeal of a logistics career. The government needs to commit to continuing support and funding for the programme.

The Apprenticeship Levy also needs urgent reform and needs to be remodelled as a Training Levy to support skills development across the logistics system. Since the Apprenticeship Levy was introduced in 2017, transport and logistics businesses have paid £825 million in levy funds. However, due to the constraints of the Levy and structural issues in the skills system, the total estimated amount of funding possible for the sector to have recovered in the same period was just £250 million. 

In the future the government needs to ensure appropriate funding for training providers, including proper funding of courses for vehicle technicians to address the significant problems of a shortage of people trained for this role. It is also essential to broaden the eligibility for roles in the sector to receive support through the National Skills Fund to ensure the sector has the skilled workforce it needs.

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