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

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).

Market Snapshot

United Kingdom Contract Logistics Market Size
Study Period: 2018-2027
Base Year: 2021
CAGR: 3.47 %
United Kingdom Contract Logistics Market Major Players

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Market Overview

The UK contract logistics market was valued at EUR 88.91 billion in 2021. It is expected to be worth EUR 109.12 billion by 2027, registering a CAGR of 3.47% during the forecast period 2022-2027.

The logistics industry stepped up to deliver services for the nation in 2020, despite facing a worsening shortage of HGV drivers, economic and financial hardship, and significant disruption in operations due to the COVID-19 outbreak. 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. According to a survey, in the early stages of the COVID-19 pandemic-induced restrictions in March 2020, 85% of respondents to COVID-19 surveys reported a general business downturn, with work and orders canceled.

The United Kingdom has the most advanced logistics industry in Europe. Owing to the variety and higher prevalence of e-commerce, this will 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% from the previous year.

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. According to the newest agreement, UK transporters are allowed to conduct one cabotage operation, whereas EU haulers are allowed to conduct two cabotage operations in UK territory. ​

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 conveyance of products or spare parts to 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 size and forecast for the UK contract logistics market in value (EUR billion).

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

The e-commerce industry is now a EUR 108 billion market in the United Kingdom, with an estimated 6% annual growth rate. This trend has been supported by logistics companies and social media platforms. That has helped make shopping online in the United Kingdom more accessible than ever before.

The United Kingdom has the most advanced e-commerce market in Europe. According to the most recent figures from the Office of National Statistics (UK), the country’s e-commerce revenue in 2019 amounted to GBP 693 billion, a sharp increase from the previous year. On a sectoral basis, wholesale and manufacturing were the two most significant industry sectors that generated the highest e-commerce sales in the same year.

In 2020, internet retail sales had grown by only 46.1%, the fastest rate recorded in the past decade. Online retailing did well in textile and clothing stores, with the most recent governmental figures showing over one-fourth of retail sales coming from online channels.

The online shopping landscape of the United Kingdom is getting more enriched, with more consumers choosing to make purchases online. In 2020, as many as 87% of UK households made online purchases, making this the highest online purchase penetration rate in the country in the past 11 years.

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 Growth

Brexit Pushing 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 of 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 generation, 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 Analysis

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.​

Recent Developments

In November 2021, Wincanton, a leading supply chain partner for the UK business, won a five-year contract with Primark, the fashion retailer, to provide transport services to all its UK stores. Wincanton will make more than 50,000 deliveries to 191 stores across the United Kingdom each year and deliver significant operational efficiencies to the supply chain. As part of the operations, Wincanton and Primark will work to ensure a reduction in carbon emissions by reducing the distances traveled by HGVs by 15% and increasing the use of alternative fuels.

In October 2021, with a total of 110,000 sq. m of new warehousing space opened across two new sites in the United Kingdom, GEODIS significantly increased its contract logistics operation in the United Kingdom. Driven by demand for contract logistics services because of the retail e-commerce boom that is as apparent in the UK market as elsewhere in Europe, GEODIS opened two new facilities, including a 40,000 sq. m warehouse in the North of England in Doncaster and a 70,000 sq. m logistics site at Lutterworth in the East Midlands region, providing employment for nearly 600 people (1,200 during the peak season).

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 (Overview of the UK Economy and Contract Logistics)

    2. 4.2 Industry Value Chain Analysis

    3. 4.3 Industry Policies and Regulations

    4. 4.4 Technological Trends in the Market

    5. 4.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.5.1 Bargaining Power of Suppliers

      2. 4.5.2 Bargaining Power of Buyers

      3. 4.5.3 Threat of New Entrants

      4. 4.5.4 Threat of Substitutes

      5. 4.5.5 Intensity of Competitive Rivalry

    6. 4.6 Market Dynamics

      1. 4.6.1 Market Drivers

      2. 4.6.2 Market Restraints

      3. 4.6.3 Market Opportunities

    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 (Integrated Warehousing and Transportation, Supply Chain Services, and Other Value-added Services)

    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 (Short-term and Long-term Impact on the Economy and Contract Logistics Market)

  5. 5. MARKET SEGMENTATION (Market Size By Value)

    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. INVESTMENT ANALYSIS

  8. 8. FUTURE OF UK CONTRACT LOGISTICS MARKET

  9. 9. APPENDIX

**Subject to Availability

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Frequently Asked Questions

The United Kingdom Contract Logistics Market market is studied from 2018 - 2027.

The United Kingdom Contract Logistics Market is growing at a CAGR of 3.47% over the next 5 years.

The United Kingdom Contract Logistics Market is valued at 88 Billion EUR in 2018.

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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