This brief yet insightful article explores where the UK logistics sector will stand in the next 12 months – amid many challenges, such as Brexit, the global pandemic and the Ukraine war.
Global outlook by 2023 in the logistics sector
According to a TMR (transparency market research) report, the current global logistics market, which is valued at $8.1 trillion, will grow to at least $15.5 trillion by 2023. Global volumes, which were estimated to be 54.6 billion tonnes in 2015, will likely reach 92.1 billion tonnes by 2024.
The report further stated that companies are investing in product innovation, business growth and expansion and construction of new facilities, in order to keep up with the competition, at both the local and international level.
An increased demand for flexibility, reliability, easy accessibility and door-to-door service has meant that the logistics sector is buzzing with activity.
Despite all these encouraging statistics, is there a downside to the UK logistics sector?
Well, despite the Ukrainian war and persistent supply chain disruption, there’s likely going to be substantial growth across the UK logistics sector in 2022.
However, passenger transportation in 2021, for instance, suffered from an onslaught of COVID-related restrictions, leading to a rather disappointing year, although in many parts of the world, travel restrictions were eased, which will definitely trigger more logistics traffic.
As for the Ukrainian war, there have been major implications on the shipping sector. As the war carries on, world trade will likely suffer, but this hasn’t stop recovery from continuing in transport and logistics. In fact, the conflict clearly indicates volume growth, particularly in the EU.
Despite some doubt around how the UK logistics sector will fare in the next 12 months, one report revealed that at least 3.4 million sq. metres of warehouse space was planned in 2021 – that’s 60% more than 2020.
Is logistics performance in earlier years an indicator of future trends?
It’s worth noting that 2020 was considered by many experts as a “record breaking” year in the UK logistics and industrial sector. Furthermore, the pandemic has become a lot less important in 2022 as opposed to, say 2019 or 2020, when fears were at their highest, as was business uncertainty.
As for 2022, a boom in consumer goods sale is to be expected, driven primarily by private households who have likely put money aside during periods of imposed lockdowns, and now have the greatest need to play ‘catch up’, as well as a much higher propensity to buy.
Closing thoughts on the state of logistics in the next year
Many logistics experts believe that the UK sector will be more expensive than other sectors – bottlenecks in transport capacities, increasing fuel prices, a general shortage of skilled workers, etc. means higher costs for companies to cope with.
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