Logistics professionals have signalled “cautious optimism” for the year ahead, with consolidation through mergers and acquisitions (M&A) thought likely, according to a report.
An analysis of the opinions of more than 100 senior executives in the industry showed 2025 marked a return to positive sentiment, with an M&A index score of 50.2, compared to 41.9 recorded in 2024.
A score above 50 indicates positive sentiment.
However, the report, co-authored by Logistics UK and RPG Crouch Chapman, in conjunction with logistics research firm Analytiqa, also found that 72% of respondents cited increased labour costs as having a significant impact on company performance.
Logistics UK President Phil Roe said: “In the 12 months since we commissioned the last UK Logistics Sector M&A Index report, we have seen the UK’s first change of governing party in 14 years and elections in several other major economies.
“In this politically volatile environment, one would expect some impact on M&A and this is reflected in our findings, with more than one in six respondents (17%) reporting they are awaiting clarity on government policy as a reason for not undertaking M&A activity in 2025.
“However, despite the need for further clarity on government policies and the threat of rising labour costs, it is encouraging that business sentiment is overall positive and significantly more positive than last year.”
The report found M&A activity had increased in the last 12 months with nearly a quarter of respondents (23%) undertaking M&A compared with 19% last year.
In addition, 21% of respondents reported they had undertaken M&A activity which had either been aborted or not completed but despite this, most (94%) consider consolidation is likely or very likely to continue over the next 12 months.
The analysis also examined company valuations and found almost half of respondents thought logistics businesses had decreased slightly (32%) or significantly (12%) in the last year.
Roe said this suggested that the sector was settling into a ‘new normal’ post-Covid:
“There is a perception that businesses were overvalued during the pandemic, as the unique circumstances faced by our industry skewed profitability,” he said.
“The sense now is that we have entered a period of more realistic pricing and our research indicates that the trend for consolidation seems likely to increase.”
