United Kingdom Contract Logistics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The United Kingdom Contract Logistics Market is Segmented by Type (Insourced and Outsourced) and End User (Manufacturing and Automotive, Consumer Goods and Retail, Pharmaceuticals and Healthcare, Hi-tech, and Other End Users). The report offers the market size and forecasts in terms of value (USD billion) for all the above segments.

Market Summary

United Kingdom Contract Logistics Market
Study Period: 2017-2027
Base Year: 2021
CAGR: >3 %

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Market Overview

The UK contract logistics market is expected to grow to register a CAGR of about 3% during the forecast period. Despite facing significant operational and financial disruption since March 2020, the logistics industry continued to supply the nation with goods, including food supplies and PPE. To deal with the COVID-19 pandemic, logistics businesses managed risks by scaling back operations, taking work back in-house, and reducing their reliance on third-party services, while many also focused on their core fleet of vehicles to save costs.

  • The United Kingdom has the most advanced logistics industry in Europe. Owing to the variety and higher prevalence of e-commerce, this may not change—the contract logistics market benefits from expanding e-commerce due to increased demand for contract logistics services. As a result of the e-commerce boom, logistics companies are expanding their services.
  • After a boom in demand for logistics locations in 2021, the United Kingdom experienced a lack of warehouse capacity. In 2021, almost 50.7 million sq. ft of big distribution warehouses were purchased, registering an increase of 3.6% compared to 2020.
  • Around 89% of all goods transported by land in Great Britain are moved directly by road. Brexit is expected to have a significant impact on the international road freight transport market and impact contract logistics as well. The international road freight transport market will almost certainly be affected by Brexit.
  • Contract logistics services are in high demand as a result of the retail e-commerce boom. Over the last decade, e-commerce has become the most popular retail trend in the United Kingdom. Even though e-commerce platforms have been around for a long time, they have only recently gained mainstream notice. In order to keep up with the rest of the globe, the expansion of internet shopping in the United Kingdom has been phenomenal.

Scope of the Report

Contract logistics refers to a long-term collaboration for a wide plethora of services ranging from the conveyance of products or spare parts to the final end customer delivery. 

The UK contract logistics market is segmented by type (insourced and outsourced) and end-user (manufacturing and automotive, consumer goods and retail, pharmaceuticals and healthcare, hi-tech, and other end users). The report offers the market size and forecasts in terms of value (USD billion) for all the above segments.

By Type
Insourced
Outsourced
By End User
Manufacturing and Automotive
Consumer Goods and Retail
Pharmaceuticals and Healthcare
Hi-tech
Other End Users (Energy, Construction, Aerospace, etc.)

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Key Market Trends

Growth in E-commerce

Significant growth in the e-commerce industry and increasing consumer propensity to shop online are among the key factors creating a positive outlook for the UK market. Logistics plays a vital role in the smooth functioning of warehousing, transportation, shipping, and online delivery. The widespread adoption of this solution is also due to the increase in reverse logistics operations, such as simple return and refund policies offered by various e-commerce platforms with flexible tracking capabilities will drive market growth.

In addition, the widespread use of logistics by several industrial sectors is another growth driver due to growing awareness of the benefits of logistics, such as reduced investment, faster delivery times, and a greater focus on consumers rather than administrative tasks. The introduction of technology-driven logistics services and the Internet of Things (IoT)-enabled connected devices, enabling the tracking of objects and remote control of elements of the transportation process, is driving the market growth.

Moreover, growing interest in sustainable development has increased the demand for green logistics to support the growth of the market. Furthermore, the prevalence of radio frequency identification (RFID), Bluetooth, and other emerging technologies, such as drone delivery and unmanned vehicles, are having a positive impact on the market growth. Extensive research and development (R&D) activities and other factors, such as increasing demand for safe refrigerated transportation across the country, are expected to boost market growth. The building is equipped with new technology and the latest storage software, further expanding the logistical capacity to manage all services. The e-commerce industry is driving a new era in customer service with extensive automation. The logistics industry is constantly adapting to new technologies and innovations.

Soon, drone deliveries might become more common in the United Kingdom. At the same time, hyperlocal services would help businesses deliver their goods, thus, fast-tracking last-mile delivery for a quick turnaround time on e-commerce orders from major retailers.

United Kingdom Contract Logistics Market- Online Retail Sales

Brexit Driving the Demand for Refrigerated Transportation

With the European Union being one of its major trade partners in the food and beverages sector, the United Kingdom, after the no-deal Brexit, is facing extreme challenges in fulfilling demand from its population. To attract other exporters, the country has lowered the tariffs on agricultural produce from outside the European Union. Among importers of the country’s meat, beef, fish, and beverages, the European Union holds a major share. Creating a market outside the Union will also be challenging for the country.

Countries like Australia, Africa, and Chile are potential trading partners for the country but are distant from the United Kingdom compared to the European Union. Trading with these countries will require huge capacities and technologically advanced cold chain services. The food and beverages sector and the pharmaceutical industry will be facing challenges in terms of the risk of drug shortages.

Major drugmakers such as Bayer, Novartis, AstraZeneca, and GSK have taken contingency steps to secure their supply. Novo Nordisk and Sanofi, Europe’s largest diabetes drug companies, for instance, are stockpiling insulin in Britain, increasing the demand for advanced cold storage logistics and storage. The United Kingdom has the third-largest online grocery market globally, following South Korea and Japan, with about 6% of grocery sales being made online. With the increasing population and shifting generations, consumers' shopping preferences and habits are changing.

The trends of healthy living and online shopping are aiding the increase in the demand for refrigerated warehousing and transportation of perishable and sensitive products in the retail market. Multiple cold chain warehouses have been established to ensure ideal storage and transportation conditions for temperature-sensitive products.

United Kingdom Contract Logistics Market- Sales from the manufacture of basic pharmaceutical products

Competitive Landscape

The market is relatively fragmented, with a large number of local and international players, including DHL Supply Chain, Wincanton, Clipper Logistics, and UPS as its key players. The market is experiencing expansions and mergers, and acquisitions as players focus on increasing their grasp over the nation as well as the international market.

The UK contract logistics market provides an example of near-perfect competition, as there are many buyers and sellers operating in the market. Even though major players have a strong footprint across the region and account for a significant market share, the market is still fragmented to some extent, with many players providing contract logistics services at different levels.​

Major Players

  1. XPO Logistics

  2. CEVA Logistics

  3. DHL International GmbH.

  4. Eddie Stobart Logistics

  5. Kuehne Nagel

XPO Logistics, CEVA Logistics, DHL International GmbH., Eddie Stobart Logistics, Kuehne Nagel

Recent Developments

July 2022: DHL announced that it would invest EUR 482 million in its UK e-commerce business, DHL Parcel UK. This investment followed a 40% volume increase since early 2020 and increased demand for e-commerce and B2B services. The new hub will include a secure bonded warehouse and customs clearance facilities to support international e-commerce, a 48-door cross-dock facility, and state-of-the-art machinery capable of automated high-altitude sorting of goods of various sizes and weights is provided.

November 2021: Kuehne+Nagel was awarded a contract to run the UK’s International Express Freight Service (IEFS) for urgent medical shipments on behalf of the Department of Health and Social Care. The service was launched to deliver products to the UK rapidly when a supplier’s own logistical arrangements were disrupted to ensure patients could continue to access the treatments they needed.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS AND INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Market Drivers

      2. 4.2.2 Market Restraints

      3. 4.2.3 Market Opportunities

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitutes

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Technological Trends in the Market

    5. 4.5 Industry Policies and Regulations

    6. 4.6 Industry Value Chain Analysis

    7. 4.7 Insights into the E-commerce Industry in the Country (both Domestic and Cross-border)

    8. 4.8 Insights into Contract Logistics in the Context of After-sales/Reverse Logistics

    9. 4.9 Brief on Different Services Provided by Contract Logistics Players

    10. 4.10 Spotlight on Freight Transportation Costs/Freight Rates

    11. 4.11 Insights into the Effect of Brexit in the UK Logistics Industry

    12. 4.12 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 Insourced

      2. 5.1.2 Outsourced

    2. 5.2 By End User

      1. 5.2.1 Manufacturing and Automotive

      2. 5.2.2 Consumer Goods and Retail

      3. 5.2.3 Pharmaceuticals and Healthcare

      4. 5.2.4 Hi-tech

      5. 5.2.5 Other End Users (Energy, Construction, Aerospace, etc.)

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 DHL Supply Chain

      2. 6.2.2 UPS

      3. 6.2.3 Wincanton

      4. 6.2.4 XP Supply Chain

      5. 6.2.5 Eddie Sobert

      6. 6.2.6 CEVA Logistics

      7. 6.2.7 Clipper Logistics

      8. 6.2.8 FedEx

      9. 6.2.9 Rhenus Logistics

      10. 6.2.10 EV Cargo*

    3. *List Not Exhaustive
    4. 6.3 Other Companies (Key Information/Overview)

  7. 7. FUTURE OF UK CONTRACT LOGISTICS MARKET

  8. 8. APPENDIX

**Subject to Availability
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Frequently Asked Questions

The United Kingdom Contract Logistics Market market is studied from 2017 - 2027.

The United Kingdom Contract Logistics Market is growing at a CAGR of >3% over the next 5 years.

The United Kingdom Contract Logistics Market is valued at 88 Billion EUR in 2017.

The United Kingdom Contract Logistics Market is valued at 109 Billion EUR in 2027.

XPO Logistics, CEVA Logistics, DHL International GmbH., Eddie Stobart Logistics, Kuehne Nagel are the major companies operating in United Kingdom Contract Logistics Market.

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