Market Trends of united kingdom road freight transport Industry
The UK's warehouse count is expected to reach 214,000 by 2027 due to a rise in demand for consumer fulfillment centers
- Russia's invasion of Ukraine in February 2022 suffocated global supply chains, raising inflationary pressures and hastening global discussions about energy security. The UK government increased its investment in new construction and maintenance of national infrastructure for better transportation connectivity and warehousing facilities. In 2022, the government committed GBP 100 billion (USD 120.58 billion) in funding over the next three years, increasing the 'fiscal remit,' which is the funding envelope within which the Commission must budget the recommendations, from 1.1% to 1.3% of the GDP beginning in 2025.
- From 2011 to 2021, road freight transportation within the UK transport and storage sector more than doubled in scale, with a growth of around 30,000 local business units. Similarly, the postal and courier segment experienced swift growth, evolving from a modest 17,000 businesses in operation in 2011 to a robust count of 42,000 ten years later. However, a minor decline was observed in 2022, with the country recording 154,665 business units within these sectors.
- The number of large warehouses in the United Kingdom is rapidly increasing. By 2027, there are expected to be around 214,000 warehouses larger than 50,000 square feet globally, up from 163,000 in 2021. Many of these warehouses are to serve as e-commerce fulfillment centers, and approximately 18% of all warehouses will be for consumer fulfillment by 2027, rising from the 11% recorded in 2021. This increase suggests the global expansion of e-commerce as the proportion of warehouses operating as trade distribution hubs begins to shift in favor of consumer fulfillment centers.
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UK government has a major influence on fuel prices, and both fuel duty and VAT (standard 20% rate) make up majority of the petrol and diesel prices
- The UK Government has a major influence on fuel prices as both fuel duty (currently 52.95 pp) and VAT (standard 20% rate) make up the majority of the price of petrol and diesel. The prices of petrol and diesel in Britain hit a new record high in February 2022. Diesel prices had hit an average of USD 2.36 per liter, while petrol cost was an average of USD 1.91 per liter, both exceeding the previous records set in 2021. With the rise, Britain's inflation soared to a 30-year high of 5.4% in December 2021. In 2022, the fuel price increased during the post-pandemic economic recovery period when the demand for fuel increased and during the Russia-Ukraine War, which affected the demand and supply of fuel.
- Diesel prices in the United Kingdom reached a record high in November 2021 after petrol prices hit their highest-ever level, in a blow to households and small businesses. The average price across the United Kingdom on October 31, 2021, was 147.94 pence (USD 0.74) a liter, narrowly surpassing the previous high of 147.93 pence (USD 0.74) set on April 12, 2012. In October 2021, diesel prices rose by 30 pence (USD 0.15) a liter over the previous year, driven higher by a sharp rebound in global oil markets.
- In August 2022, the oil price dropped under USD 100 and finished the month at USD 90.63 a barrel. Prices dropped further in 2023, and by May, a barrel of oil was down to USD 72.50. The average cost of petrol at UK forecourts has risen to break 150 p a liter (USD 1.80) for the first time since the start of 2023, and diesel has risen to 152.41 p a liter (USD 1.83). A cold European winter and spring also meant supplies had already been heavily depleted by the summer.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- UK announces over USD 39 million in 2023 to strengthen life sciences manufacturing
- E-commerce accounted for 30% of the total retail consumption in 2022 in the UK, up from 20% in 2020
- UK's global trade efficiency declines with LPI rank falling to 19th place in 2023 due to logistics infrastructure quality
- UK aims to reach more than USD 1.20 trillion export target by 2030 under ambitious plan
- Rising fuel costs with more than 25% cost share, impacting the overall trucking operation costs in the United Kingdom
- Despite the global shortage of semiconductors and raw materials, including steel and aluminum, demand for HGV's has remained robust in the United Kingdom
- Truck driver shortage post Brexit coupled with surging inflation and fuel prices impacting overall road freight pricing
- Price rises of food, fuel, and petroleum cause producer and consumer prices to increase
- The agriculture, fishing, and forestry sector was the fastest-growing during the study period (2017-2021)
- Manufactured product sales in the UK grew by 7% YoY and reached USD 458.8 billion in 2022
- The UK government channeled about USD 170 million into vital road projects in 2022 to elevate infrastructure and sustainable initiatives
- UK anticipates gas imports to rise by 70% by 2030 amid halt in domestic gas production
- Growing registrations witnessed for heavy goods vehicles, rigid trucks, and articulated trucks in the United Kingdom
- Growing focus on road infrastructure development and growing trade volumes boosting road freight tonnage despite decline manufacturing output
- Road freight is the primary mode of transport in the United Kingdom, which handled 1.6 billion tons in 2022
