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This is an overarching industry that hosts a multitude of sub-sectors. From managing how resources are acquired to sourcing warehouses and transporting goods to ultimate end users, the processes involved are complex and constantly adapting. In the past decade, the significant rise of e-commerce has boosted the UK industrial and logistics sector exponentially. In 2019, approximately 20% of all retail sales in the United Kingdom were made online and an estimated 1.5 billion was spent through internet retail sales in March 2020 alone. As a result of this, occupiers of warehouses have also broadened to include grocers and high-street retailers.
The East and West Midlands have been distribution hub strong-holds since the Industrial Revolution owing to the “sizable population, central location and dense transportation network”. The Golden Triangle remains the key hub for logistics with excellent transport links but with increased demand, the area has become saturated with warehouses. It is therefore widely anticipated that retailers will look to new horizons in East and North West of England along the M62 Corridor.
Advances in technology have been slow to penetrate this sector but it is clear that data analytics, automation and capitalizing on cloud technology can forever disrupt the industry. According to PwC platform technology has led to a new type of business model pushed by innovative start-up companies meaning that companies who refuse to adapt run the risk of being left behind.
The relative profitability and growth of this sector hinges entirely on how industry players respond to three key events: Brexit trade agreements, Covid-19 and the Climate Emergency. The pandemic has altered the way in which consumers purchase goods and services placing a huge demand on e-commerce sites like Amazon. Whilst this has secured enormous profits, major retailers are coming under increasing pressure to expand logistics operations in sustainable ways.
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