‘Logistics: Delivering a solution to the UK’s productivity puzzle’ outlines how the ability of UK’s logistics system to support greater competition and efficiency in the UK economy is being held back by challenges caused by border friction and a lack of investment in national infrastructure, innovation and skills, which, if addressed, could also result in an increase in annual household disposable income.
Logistics is a big part of the solution
David Wells, chief executive of Logistics UK comments: “The UK’s economy faces a productivity challenge at present, but logistics can be a big part of the solution. This report emphasises how improving the productivity of the logistics sector would have a positive impact on the whole economy. However, the findings also suggest that reversing the UK’s decline in productivity and delivering these gains is beyond the control of industry operators alone and will take concerted effort and investment by government.
“To ensure that the nation’s decline in productivity is addressed, it’s imperative that government works with the sector to establish a cross-Whitehall Logistics Productivity Forum, to maximise the benefits that this sector can deliver to the whole economy.”
With the UK currently in joint 19th position in the World Bank logistics rankings, the report, sponsored by Amazon and Volvo Trucks, outlines how a return to the top ten would unlock a significant boost in GDP through productivity gains. This would not only result in an approximate £80 per annum increase to the annual income of the UK’s 30 million households – a £2.3 billion boost to domestic budgets by 2030 – but it could also raise enough in additional taxation to finance the annual salaries of more than 20,000 nurses. If the UK was to become a global leader in logistics, this benefit would be doubled to £7.9 billion a year.
A strategic partnership
“To deliver the gains outlined in this report, the logistics sector requires government to work in strategic partnership with the private sector to deliver improved infrastructure, reduce friction at the country’s borders to boost trade, resolve skills gaps and invest in innovation to drive efficiency.”
The new analysis also highlights that, while there would be a significant economic benefit for the UK from addressing these challenges to close the gap with other nations, this must be achieved alongside delivering the transition to a green economy.
He adds: “If the UK gets the transition to net zero right, it will align with long term higher productivity. In the short-term, significant levels of investment are required to make the necessary switch efficiently. Both public and private investment needs to avoid stranded assets. The logistics sector and government must work in partnership ensure that taxpayer and private investment in the transition delivers value for money and supports, rather than hinders, economic growth.
“Government support is vital to support the pace of change required, to prevent a loss in private sector efficiency, and ensure a smooth transition for all sectors of the economy.”
The full report can be found here: https://logistics.org.uk/research-hub/reports/logistics-delivering-a-solution-to-the-uk-s-produc