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Logistics UK makes detailed submission to HM Treasury ahead of important Spending Review

The 2021 Spending Review, which will conclude next week (27 October 2021) alongside the Autumn Budget, will be one of the most important in the UK’s post-war history, Logistics UK has said.

The business group has made a comprehensive and wide-ranging submission to HM Treasury, which makes key asks of the government in the areas of transport schemes, road, rail and aviation investment, autonomous transport, ports and inland waterway infrastructure, and investment in the UK’s borders.


With its world-class maritime and airport infrastructure, logistics has a unique, transformative role to play in the levelling up agenda, Logistics UK argues in its submission. It also has a key role to play in delivering a net zero future by bringing in the technologies of tomorrow, such as advanced biofuels, electric vehicles and hydrogen applications.

As the fortunes of logistics are tied to the fortunes of the wider economy, transport infrastructure spending is a key area for concentrated and enhanced public spending. Roads need to be improved across the UK and facilities need to be provided for professional drivers.

A commitment to large-scale testing of alternative fuel options is needed to facilitate the delivery of the government’s Transport Decarbonisation Plan, published in the summer.

Investment in the UK’s borders through IT systems and staffing is also needed to ensure post-Brexit trading arrangements are optimised.


In its submission, Logistics UK argues that the government should continue to provide a supportive environment for private sector investment in warehouses, maritime ports and airport infrastructure. Although the business group appreciates that there are always issues about ensuring the cost effectiveness of delivering infrastructure enhancements, research has shown that the costs of rail electrification schemes, for example, can be lowered by up to 50 per cent if supported by a rolling programme of work.


Road congestion cost the UK economy nearly £7 billion in 2019, and it is estimated that having an HGV stuck in congestion costs its operator £1 per minute. It also hampers journey reliability. Congestion can be tackled through a combination of investment in new infrastructure and maintenance of existing roads, Logistics UK argues. While it supports the outcomes in the Road Investment Strategy, the business group calls on government to ensure funds are available to deliver the schemes during the control period. Maintenance is also crucial and Logistics UK calls for more investment to preserve the quality of the roads the UK requires.

Road freight is embracing the transition to net zero, with more van fleets becoming electrified. However, a survey of Logistics UK members showed that operators are being prevented from scaling up EV deployment owing to the electricity network being insufficient to power a whole fleet. The business group calls for government intervention to enhance the electricity supply. As the path to decarbonising HGVs is less clear, Logistics UK calls for large-scale demonstration projects to be funded with industry support.


Connected and automated technologies are of growing interest to the logistics sector and Logistics UK expects their deployment to have a profound impact on the industry. The business group’s focus is on the development of the right applications that can support logistics operations to become more flexible and resilient. It calls for early adopters to be subsidised to help accelerate the mass market adoption of this technology.


Rail freight offers a significant carbon reduction via modal shift, Logistics UK argues, alongside congestion and road safety benefits. The business group is pleased to note that the Transport Decarbonisation Plan included a growth target for rail freight and a pledge to pursue infill electrification schemes for freight decarbonisation.


Ports account for 90% of goods arriving in the UK and Logistics UK calls for more support for inland port connectivity to benefit the wider UK economy. This could include strategic rail enhancements to link ports, particularly between the Humber and Liverpool to major cities in the north. Inland waterways are also a vitally important, but often overlooked, transport mode.


The air cargo sector plays a vital role in the UK’s international trade. Pre-pandemic figures showed that this mode accounted for 40% of total UK trade by value but under 1% by volume. As the global aviation sector restarts, Logistics UK argues that government funding is required to support landside connections to airports, to enable cargo to move efficiently to other supply chain partners.


To support the final transition to post-Brexit trading arrangements, including the introduction of controls on imports from the EU during 2022, Logistics UK calls for more government funding. The business group argues that delivering the world’s most effective border is just as important as negotiating trade facilitation mechanisms with the UK’s trading partners.

“Given the impacts of COVID-19 on our economy and challenges to public finances, there have been few Spending Reviews in the post-war period more important than this one,” said Elizabeth de Jong, Director of Policy, Logistics UK, “That is why Logistics UK has made a full and thorough submission to HM Treasury, detailing all of the areas which we believe require government investment in order for the logistics sector to play its vital role underpinning economic activity in the UK.”


Published On: 21/10/2021 16:00:54


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