Logistics industry trends for 2021  

No one in the logistics sector is likely to forget 2020 anytime soon. On the cusp of a new year that all are hoping will bring less upheaval, it’s time to look ahead to 2021 and what could be in store for the UK logistics industry over the next twelve months.

New logistics hubs nationwide

With millions unable to reach the shops for much of the year, 2020 has seen the prevalence of online shopping reach new heights. Despite difficult and unprecedented circumstances, couriers and delivery companies responded rapidly to huge surges in demand within some sectors, and an almost overnight drying up in others.

After months of extended delivery hours and contact-free doorstep drops, consumers seem to have developed a lasting preference for almost round-the-clock delivery. This consumer shift is likely to result in a flurry of new logistics hubs, close to cities and urban centres.

While the UK’s existing hubs tend to be located next to motorways and on city boundaries, it’s doubtful that these will provide the proximity and flexibility necessary to meet surging last mile delivery and reverse logistics needs. Commercial land for new warehouse space could well become even more sought after in premium locations, following in the footsteps of the enormous logistics centre currently being built near Swindon, set to become the UK’s largest at 2.3 million square feet.   

Sustainability

Alongside the need to deliver more frequently, logistics operators are also being compelled to do so more sustainably. Fuelled by the national pledge to achieve carbon neutrality by 2050, this emphasis has been growing steadily over recent years and only seems likely to intensify in 2021. Recently the government announced that the ban on combustion engines will now start from 2035, rather than 2040 as originally planned.

There are also new ultra-low emission zones (ULEZ) planned for Bath and Birmingham in early 2021 – similar to the nation’s first launched in London this year - as well as more across major cities in Scotland. While daily charges for vehicles under 3.5 tonnes (that don’t meet ULEZ emission standards) seem moderate at £12.50, it won’t take long for this to become a serious drain on resources for couriers who regularly enter these areas. For large vans and HGVs over this weight, the daily charge jumps to £100 a day. What’s more, London’s ULEZ is due to be extended to create a single larger zone bounded by the North Circular Road (A406) and South Circular Road (A205) in October 2021.

Under mounting pressure, logistics operators will need to continue to explore new operational approaches, such as alternative fuels and/or electric fleets, as well as minimising empty miles and optimising sustainable driving practices.

Brexit

At the time of writing, UK hauliers looking to enter France have been halted at the Dover border, while the government works to lift the temporary travel ban imposed by EU nations in response to the new COVID-19 variant. And all while the end of Brexit transition period is just days away, and we are still unaware of whether a deal will be agreed.

This set of circumstances seem to have converged to create a ‘perfect storm’ just before Christmas, as UK-bound deliveries stay on the other side of the Channel to avoid the return queues, many retailers see goods delayed and consumers face going without last minute orders made after the ramping up of festive lockdown restrictions.  

It’s a stark reminder that while Brexit may have been somewhat overshadowed by COVID this year, the UK’s exit from the European Union (EU) will be firmly back on the agenda in 2021. While a potential deal is still being decided, it’s difficult to predict how exactly Brexit will impact the logistics sector, but it’s clear that there’s still much to adapt to and further supply chain interruptions are more than possible.

Any logistics operation that trades with Europe should do all it can to be as prepared as possible for a No Deal Brexit, taking action on measures including Economic Operators Registration for exporters, the extra customs declarations that may be necessary, paying duties in full and changes to VAT arrangements. No Deal would mean trade between the UK and EU takes place under World Trade Organization(WTO) rules which, in the most general sense, are likely to take longer and cost more, although exporters will be able to charge zero per cent VAT for EU customers, as they can now with those from the rest of the world.

There is useful industry-focused Brexit advice and guidance on Logistics UK.

Rely on EPOD and logistics optimisation in 2021

Facing the future becomes more certain with the right digital support. Today’s Electronic Proof of Delivery (EPOD) systems go beyond simply providing POD, providing a digital infrastructure across all areas of logistics operation, from route optimisation and job scheduling, to fleet maintenance and compliance management. To find out more about Touchstar’s EPOD solutions and how they can help your business succeed in 2021 and beyond, please get in touch with us.