Comment: Logistics and the economy

There's a mixed outlook predicted for 2025, but logistics has a strategic role to play in kickstarting economic growth, comments David Wells OBE, Logistics UK's Chief Executive

Trading conditions continue to be tough and the economic outlook for 2025 looks mixed. While growth is expected to return to the economy at some point this year, it is predicted to be only in the range of one or two percent which will not cause significant change for our industry.

Rising employment costs, largely from higher employers’ national insurance contributions and national minimum wage increases, could have a significant effect on potential investment and business confidence, especially with smaller companies.

Smaller businesses are also expressing concerns over the Employment Rights Bill which is moving through parliament and while we all want to see exploitative practices eradicated, any new legislation must not remove the helpful and flexible working arrangements that suit both the employee and employer.

In this type of environment, we need to make sure that any change does not provoke unintended consequences for the movement of goods, which is why it is essential for the government to work closely with the sector and it can exploit our famous “can do” attitude to get the economy moving.

Key to this is a fair decarbonisation roadmap and there have been some notable announcements already this year from companies investing in electric and low emission vehicles.  Both Amazon and M&S have shared details of how they are greening their fleets: Amazon is adding almost 150 electric heavy-goods vehicles to its operations, and M&S is introducing 85 zero or lower emission vehicles.

Announcements like these show how the logistics sector is already embracing the challenge of achieving net zero, and we believe the UK can become a world leader in logistics sustainability with a sustainability and decarbonisation roadmap developed in partnership with the government.

The private sector needs confidence to invest in long-term business development and to do so, 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 flexible approach will be needed to achieve a fair transition to net zero, while keeping costs down for customers and supply chains resilient.