Organisations working in high-risk industries like manufacturing, warehousing, supply chain, and logistics, are well aware of the risks and potential hazards their workers face each day. Unfortunately, despite their best efforts, many businesses do not have the appropriate health and safety controls to minimise risk and hazards at the workplace.
What will be the state of the UK logistics sector in the next 12 months?
This brief yet insightful article explores where the UK logistics sector will stand in the next 12 months – amid many challenges, such as Brexit, the global pandemic and the Ukraine war.
Global outlook by 2023 in the logistics sector
According to a TMR (transparency market research) report, the current global logistics market, which is valued at $8.1 trillion, will grow to at least $15.5 trillion by 2023. Global volumes, which were estimated to be 54.6 billion tonnes in 2015, will likely reach 92.1 billion tonnes by 2024.
The report further stated that companies are investing in product innovation, business growth and expansion and construction of new facilities, in order to keep up with the competition, at both the local and international level.
An increased demand for flexibility, reliability, easy accessibility and door-to-door service has meant that the logistics sector is buzzing with activity.
Despite all these encouraging statistics, is there a downside to the UK logistics sector?
Well, despite the Ukrainian war and persistent supply chain disruption, there’s likely going to be substantial growth across the UK logistics sector in 2022.
However, passenger transportation in 2021, for instance, suffered from an onslaught of COVID-related restrictions, leading to a rather disappointing year, although in many parts of the world, travel restrictions were eased, which will definitely trigger more logistics traffic.
As for the Ukrainian war, there have been major implications on the shipping sector. As the war carries on, world trade will likely suffer, but this hasn’t stop recovery from continuing in transport and logistics. In fact, the conflict clearly indicates volume growth, particularly in the EU.
Despite some doubt around how the UK logistics sector will fare in the next 12 months, one report revealed that at least 3.4 million sq. metres of warehouse space was planned in 2021 – that’s 60% more than 2020.
Is logistics performance in earlier years an indicator of future trends?
It’s worth noting that 2020 was considered by many experts as a “record breaking” year in the UK logistics and industrial sector. Furthermore, the pandemic has become a lot less important in 2022 as opposed to, say 2019 or 2020, when fears were at their highest, as was business uncertainty.
As for 2022, a boom in consumer goods sale is to be expected, driven primarily by private households who have likely put money aside during periods of imposed lockdowns, and now have the greatest need to play ‘catch up’, as well as a much higher propensity to buy.
Closing thoughts on the state of logistics in the next year
Many logistics experts believe that the UK sector will be more expensive than other sectors – bottlenecks in transport capacities, increasing fuel prices, a general shortage of skilled workers, etc. means higher costs for companies to cope with.
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According to an HSE report, around 54,000 workers are involved in non-fatal accidents in the manufacturing sector each year. Most of the injuries they suffer are a direct result of manual handling accidents, trips, slips, and falls, contact with moving machinery, and being struck by moving objects.
It is estimated that the logistics industry will grow at a CAGR of 10-12%, reaching a value of $380 million by 2025. A large driver of this growth will be technology and automation – from robotics and the Internet of Things (IoT) to artificial intelligence (AI), better integration of the various ecosystems involved, digitisation of processes, and more.
Supply chain inspections often prove to be a challenge, even for leading, well-established companies. However, standardisation has now become one of the chief methods of optimising the greater supply chain and ensuring that all managers, departments, and teams are on the same page.
According to a 2019 report published by the Journal of International Logistics and Trade, political unrest are among the leading causes of supply chain disruptions. A SAP survey reported that 58% of US business leaders believe supply chain problems primarily stem due to global political unrest.
Even though a myriad of digital processes have been introduced across many industries in the UK economy, a recent report indicates that at least 96% of UK manufacturers believe there is an underinvestment in technology and digitisation in their sector.
Did you know that manufacturers are still using paper in more than a third (35%) of their processes on average? What’s more, manual spreadsheets are still used for nearly half (49%) of all manufacturing-related processes.
If you think about, warehouses and everyone working within those walls, are the unsung heroes of supply chain and distribution. Without quality warehouses equipped with the latest technology, we would not be enjoying the super-fast at-home deliveries or products being available on shelves almost on a 24/7 basis.
In the world of business, the last thing any owner, CEO or stakeholder wants to hear is “disruption”. Effective supply chains that run like a well-oiled machine are integral to any business’s success.
The manufacturing industry has been slow to move forward, especially from an ecosystem-wide and enterprise-wide digital transformation perspective.