Freezing or reducing fuel duty was top of the wish list for respondents to the Logistics UK Industry
Survey 2022/23, followed by investing in infrastructure and more support for switching to alternative fuels.
While 2022 saw initial confidence and and increased business activity, the second half of the year was
affected by high energy costs and cost inflation, the report found.
Despite the reduction of fuel duty by 5ppl in March 2022, the survey found the greatest deterioration in business performance was due to high fuel prices. Respondents also reported issues with the recruitment of skilled staff and a decline in the clarity of trading arrangements with the EU.
But overall business performance was perceived to have improved by January 2023, with 34% of survey respondents having better economic expectations for 2023 compared to 2022.
Logistics UK chief executive David Wells said: “While the initial months of 2022 witnessed a resurgence in consumer spending and increased business activity, in the second half of the year the logistics sector navigated a difficult economic climate due to a global energy price shock – triggered by the Russian invasion of Ukraine – in addition to changing trade processes driven by Britain’s exit from the EU and the increasing need to decarbonise.
"Nevertheless, our industry continued to demonstrate its adaptability with the UK trading £414bn in exports and £644bn in imports in 2022.
"The outlook for overall business performance continues to be encouraging with 77% of survey respondents noting the same or better economic expectations for 2023 compared to 2022."
In 2021, logistics businesses added £163bn to the UK economy and generated just over £1tn in revenues, a 19.2% increase on the previous year and the same as 2019. The logistics industry in the UK comprises 227,000 logistics enterprises, directly employing 1.8 million people across England, Wales, Scotland, and Northern Ireland. This is in addition to the 890,000 people employed in logistics roles in non-logistics businesses, meaning there are 2.7 million people employed in logistics overall.
However, the UK’s competitiveness in logistics has declined, according to the World Bank’s 2023 Logistics Performance Index (LPI) report. The UK was ranked 19th on the performance indicator, a significant drop compared to the average placement of 6th between 2012 and 2018. The fall in ranking from 2018 to 2023 is associated with Brexit-related changes that contributed to a decline in on-time shipments and efficient customs processes, as well as challenges in tracking shipments.