Why we need a dedicated Minister for Logistics and Supply Chain

By David Wells OBE, CEO of Logistics UK 

Every part of our economy relies upon logistics to provide all the goods needed to generate and support business, from construction to retail, banking to infrastructure. However, decisions are often taken without input from our industry. Our members recognise that focusing on investment and growth in our sector will bring dividends for the UK’s whole economy.  

The appointment of a Minister for Logistics and Supply Chain, with the interests of our sector at heart, will ensure that the needs of our industry are considered as part of any decision-making process, rather than as an afterthought, which can add complexity and cost to any project.  

Heart of the economy 

Logistics activity is at the heart of the economy, creating opportunities and delivering for everyone, everywhere, every day. In fact, logistics activity contributes a staggering £163 billion in GDP each year, representing 12% of the country’s non-financial economy. 2.7 million people are employed in logistics roles – 8.2% of the UK’s workforce – and there are 230,000 logistics businesses across the UK involved in making, selling and moving goods.   

Recent research conducted by Oxford Economics found that reversing the decline in the UK’s productivity, caused to a large extent by deteriorating infrastructure quality and increased border friction, would have a significant impact on the UK’s productivity. In fact, it could deliver a £3.9 billion to £7.9 billion boost to GDP through productivity gains by 2030.  

National logistics network 

One of the biggest ways that the incoming government could assist in improving productivity is through investing in a national logistics network, as well as in planning reforms and innovation funding to enable goods to be moved in the optimum productive, strategic and green manner.   

The UK’s logistics sector is becoming increasingly integrated, between modes, sites and businesses, as well as working smarter and more innovatively. This integration needs to continue, and investment in infrastructure needs to be prioritised if integration, and the resulting productivity benefits, are to be realised.  

Top of our asks for the incoming government is the establishment of a national logistics network.  The government’s 2022 Future of Freight plan committed them to creating such a network and making this a reality.  

Speeding up the planning process is also vital to deliver efficiencies and economies right across the country. Increasing the use of rail freight is key to the success of this ambition, not only reducing congestion and lowering carbon emissions, but also boosting trade through improved connectivity with ports and airports. A switch of mode also adds further resilience to the supply chain as a whole, which benefits the entire economy.  

The UK’s transport infrastructure is increasingly constrained by congestion and lack of maintenance – traffic congestion cost the UK economy in £9.5 billion in 2022 alone. Journey planning has become difficult to predict, leading to increased business costs. This is where shifting loads from road to rail could benefit the whole UK, providing the infrastructure investment necessary to enable such a move can be guaranteed.  

And it is also vital that government invests to ease congestion at existing hotspots across the rail network to ensure the smooth passage of goods as well as passenger trains.  

Leading the way 

As an industry logistics has always led the way, with technological and other advancements aimed at improving efficiencies and reducing transit times.  For some time, logistics businesses have led the way in the use of AI and robotics, implementing clever solutions to support modal shift and adopting new technologies to reduce carbon emissions.  

Our manifesto challenges government to think about the whole supply chain to enable broader investment and encourage further innovations to be created and implemented. The incoming administration needs to work with investors, SME innovators and the sector as a whole to develop new solutions that will benefit all those charged with moving the goods the economy needs.  

To establish such a national network will require reforms to planning regulations and alignment between national, regional and local plans. Infrastructure needs to be planned holistically, with a longer term, 30-year strategy to run alongside a five-year delivery plan.   

Our industry has committed to a net zero future, but now needs support to ensure a smooth transition to a greener economy. Our members are committed to playing their part in helping the UK to achieve net zero but need a greater say in plans to deliver a fair transition and unlock private investment.  

Any new plans must protect the current supply chain and the demands of its customers: developing plans for rail electrification and calling for investment in its implementation can only be successful if ongoing business relationships are maintained.  

Our sector is already making key decisions on the road to net zero, while operating on narrow margins, so must invest carefully to cut emissions while avoiding inflationary impacts for households, businesses and public services.   

There is also some risk that the energy infrastructure needed will not be delivered at the pace our sector requires – something that government must pay close attention to in order to enable modal shift to happen efficiently and at pace.  

A collaborative approach 

Unlocking the necessary private sector investment in decarbonisation will require the new government to work in partnership with industry and be committed to developing clear plans and policies.  

Logistics UK is clear that the industry must have a seat at the table as plans progress, to ensure that strategic decisions about energy supply move from a “first come, first served” approach to prioritisation by industry and community needs and are based on realistic timescales and available technologies. All this should help our members to continue to move goods efficiently without increasing costs for households, businesses and public services.  

The next generation 

Underpinning all this activity is the need to maintain and grow the workforce of the future, so that logistics benefits from the best and brightest talents to shape the sector. The Generation Logistics campaign has already made progress in changing the way young people think about careers in the industry, and is now expanding its activity to include working with educators and other professionals that advise young people on their future opportunities.  

There is still much to be done, but with the continuing support of the industry, logistics should become a career spoken of in the same breath as accountancy, medicine, retail or leisure – our manifesto urges the next government to continue the existing funding model to continue and expand the campaign’s work.   

To find out more, please visit www.generationlogistics.org   

We need apprentices 

While the sector continues to raise awareness to attract the next generation of workers, it is clear that the Apprenticeship Levy needs urgent reform to enable employers to draw down the necessary funds. There is a lack of colleges offering the apprenticeships the sector needs, and more flexibility is required to support training for roles that do not necessitate a year-long apprenticeship. In the experience of our members, the lifetime skills guarantee is currently inflexible and barriers to entry are too high.  

The development of innovative, integrated infrastructure backed by a national logistics network will deliver efficiencies and opportunities that can benefit us all. Giving logistics a voice at the heart of government would ensure that the needs of industry and business are heard, and that our sector can work with government to drive up the country’s productivity.   

To find out more about the asks of the logistics sector, the full Logistics UK 2024 Manifesto can be found at https://logistics.org.uk/research-hub/policies/logistics-uk-2024-manifesto   

Published On: 29/02/2024 14:00:00

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