There have been many challenges faced by the UK haulage industry over the last couple of years, from HGV driver shortages to major port strikes. Now it seems that there is another challenge that exists in the supply chain – a lack of warehousing, and it’s something that’s having a slowing effect on the contract logistics market. 

Last year, the world’s contract logistics market experienced the slowest growth for 9 years (aside from the 2020 contraction due to the Covid pandemic), and that’s according to the latest Transport Intelligence (TI) report on global contract logistics. 

Compounding a Global Economic Slowdown

As part of the research carried out into the contract logistics market, it was found that the global economic slowdown, combined with a weakening economy and a lack of warehousing, had a slowing impact on the sector. The report, published last week, shined a spotlight on core trends, such as warehouse automation, robotics & warehouse cost & availability. 

Also examined were some of the key challenges impacting the contract logistics sector, and it was found that one of the primary restricting factors was a dearth of available warehouse space for logistics providers. This was in addition to the fact that 9 out of 10 third-party logistics (3PL) respondents reported pressure on margins caused by elevated costs. 

The Pace of Acquisitions Also Slowed in 2023

The wide-ranging TI report revealed that while mergers & acquisitions (M&A) deals have been especially common during the past several years, that too has slowed moving into 2023. Speaking on the matter, TI research analyst, Nia Hudson, had this to say:

“2022 brought an increasingly challenging operating environment for contract logistics providers, characterised by high inflation and weak demand. Contract logistics companies have largely mitigated inflationary issues at the top line by largely passing increasing costs on to customers.

However, from a demand perspective, the market does not seem to have fared as well following the market’s post-pandemic bounce back in 2021. TI’s real terms growth forecast, which shows underlying market growth and changes to market performance, illustrates this well.”

Challenges to Overcome For a Healthy UK Supply Chain

It is undoubtedly a challenging time for the UK supply chain, but that’s nothing new. HGV driver shortages, poor roadside facilities and industrial action have all taken their toll, but that shouldn’t take our eyes off the prize – a healthy, resilient UK haulage industry. There will be more challenges on the way, for sure, but with the right approach, anything is possible. 

At HGVC, we’re contributing to the effort by offering industry-leading HGV licence acquisition programs that are scalable to any size of requirement. Delivered via our national network of training centres, our highly experienced instructors are able to cater for single-driver training as well as large-scale programs. 

If you’d like to find out more about us and how we operate, all you need to do is take a browse around our website. Alternatively, to speak to us directly about your needs, call 0330 818 8888 or click on ‘contact us’, and we’ll get back to you without delay.