Top 5 challenges facing the UK logistics sector

Following the Pandemic the UK logistics sector has continued to experience rapid change and innovation. However, it is also seen a number of challenges.

We asked Philip Bird, our Corporate Finance Partner, who has considerable experience in the UK logistics sector, and who heads up our service offering to clients in the UK logistics sector, to set out the top 5 challenges that those in the UK logistics sector continue to face today.

The UK logistics sector was hailed as one of the “hero” sectors during the pandemic but the UK logistics sector has come down to earth with an almighty bump over the past year.

The breakdown of the global supply chain and an increasingly tough macro-economic environment has highlighted some long-standing issues affecting the sector.

Below is Philip’s view on the top 5 current and key challenges facing the UK logistics sector today:

1. Rising fuel and freight costs – these are driven by inflation and supply chain issues as a result of the invasion of Ukraine.

2. Employee recruitment – not only HGV drivers but also warehouse and managerial staff.   Businesses across the UK logistics sector are asking themselves how they recruit and then retain the best members of their team.

3. Customer service at zero cost – there are growing expectations from customers of ecommerce for faster delivery but at zero cost coupled with real time information on delivery status. But how do UK logistics operators manage this in an inflationary environment and with growing ecommerce volumes?

4. Supply chain visibility – how do UK logistics operators join up the different parts of the supply chain? Particularly following our departure from the EU and further fragmentation following the pandemic. It is with no doubt that technology has a key role to play here.

5. Environmental, supply and governance (“ESG”) issues – increasingly driven by regulatory requirements. Logistics companies have major areas to address in the area of ESG – such as “getting greener” and improving working conditions for staff.  The UK logistics sector employs over 2 million people in the UK and the importance of business ethics should never be underestimated.

How can RPGCC’s UK Logistics experts help with these challenges?

Firstly, our tax team can help with corporate structuring.  We can work with you to ensure that you have the most efficient corporate structure for tax purposes. Reducing your tax in a rising cost environment has to be a key part of financial management for UK logistics companies.

Have you considered your ESG position?  We can help with ESG advisory work. We can assess, across a series of parameters, how you measure up against ESG objectives and criteria. We can also look at what measures you need to implement/adopt to be fit for purpose.

You might want to consider broadening your supply chain offering through strategic acquisitions. Our Corporate Finance Team can help identify suitable acquisition targets and manage the process from the point of negotiation and due diligence through to completion.

Our Corporate Tax team, and research & development tax experts can look at your eligibility to claim R&D tax credits. R&D tax credits are not just for men in white coats, any business that takes a trial and error approach, has a defined R&D process or prototype room can be eligible.  Your R&D work does not even have to have been successful, even failed R&D projects can form part of a Research and Development tax claim.

If you would like to speak to a member of our team regarding your UK logistics business and how we might help you with the challenges you are facing today,  contact us or telephone us on 020 3697 7147.  Or you can visit our web chat in the bottom right corner which is manned during office ours and you can leave a message out of hours.

The RPGCC team are always just a click or call away.

Corporate Finance Partner Philip Bird

Corporate Finance Partner | pbird@rpgcc.co.uk

 

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