1、LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE Report commissioned by Logistics UK Report sponsored by Amazon and Volvo Trucks LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE ABOUT OXFORD ECONOMICS Oxford Economics was founded in 1981 as a commercial venture with Oxfor

2、d Universitys business college to provide economic forecasting and modelling to UK companies and financial institutions expanding abroad.Since then,we have become one of the worlds foremost independent global advisory firms,providing reports,forecasts and analytical tools on more than 200 countries,

3、100 industries,and 8,000 cities and regions.Our best-in-class global economic and industry models and analytical tools give us an unparalleled ability to forecast external market trends and assess their economic,social and business impact.Headquartered in Oxford,England,with regional centres in New

4、York,London,Frankfurt,and Singapore,Oxford Economics has offices across the globe in Belfast,Boston,Cape Town,Chicago,Dubai,Dublin,Hong Kong,Los Angeles,Mexico City,Milan,Paris,Philadelphia,Stockholm,Sydney,Tokyo,and Toronto.We employ 450 staff,including more than 300 professional economists,industr

5、y experts,and business editorsone of the largest teams of macroeconomists and thought leadership specialists.Our global team is highly skilled in a full range of research techniques and thought leadership capabilities from econometric modelling,scenario framing,and economic impact analysis to market

6、 surveys,case studies,expert panels,and web analytics.Oxford Economics is a key adviser to corporate,financial and government decision-makers and thought leaders.Our worldwide client base now comprises over 2,000 international organisations,including leading multinational companies and financial ins

7、titutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.ABOUT LOGISTICS UK Logistics UK is one of the countrys largest business groups,representing the entire logistics industry and supporting,shaping and standing up for safe and efficient logistics.

8、Our membership of more than 20,000 includes global,national and regional businesses and SMEs spanning road,rail,inland waterways,sea and air as well as the buyers of freight services,such as retailers and manufacturers.As an organisation,we deliver services,representation and thought leadership,help

9、ing members and policy makers to seize new opportunities for the sector and the economy as a whole,right across the country.Logistics is a sector delivering an increasingly safe,sustainable and efficient system of national infrastructure creating opportunities across the UK and linking the UK to the

10、 global trade network.Spanning land,water and air,it delivers for everyone,everywhere,every day.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 2 September 2023 All data shown in tables and charts are Oxford Economics own data,except where otherwise stated and cited in footnotes,and a

11、re copyright Oxford Economics Ltd.This report is confidential to Logistics UK and may not be published or distributed without their prior written permission.The case studies presented in this report were provided by Logistics UK and its members,and the modelling and results presented here are based

12、on information provided by third parties,upon which Oxford Economics has relied in producing its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projections shown.To discuss the report further please contact:Henry Worthington: Oxford

13、 Economics 4 Millbank,London SW1P 3JA,UK Tel:+44 203 910 8061 LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 3 FOREWORDS FOREWORD BY DAVID WELLS OBE,CHIEF EXECUTIVE,LOGISTICS UK Welcome to Logistics:Delivering a solution to the UKs productivity puzzle an independent report for Logist

14、ics UK by Oxford Economics,a leading economic advisory firm.This report,sponsored by Amazon and Volvo Trucks,is essential reading for anyone who wants to understand the role the logistics sector plays underpinning the whole UK economy and how,with the right partnership with government,it can help to

15、 solve the UKs productivity puzzle.We already know that logistics delivers for households,businesses and public services every day and is one of the UKs largest economic sectors and employers.Logistics:Moves goods 200 billion tonne kilometres within the UK per year and enables the trade of more than

16、 1 trillion of goods,Adds an annual 163 billion to the UK economy,equating to 12%of the non-financial UK economy,Pays 5 billion in revenue to Treasury through Vehicle Excise Duty(VED)and Fuel Duty,in addition to other taxes,and Employs 2.7 million people in logistics roles,8.2%of the UK workforce.Wi

17、th the UK still grappling with the low productivity experienced since the global financial crisis,it is also crucial to understand that logistics is a driver of innovation and productivity for the whole economy.The logistics sector transformed the UK,from its canals,ports,railways and motorised road

18、 vehicles and,from the second half of the twentieth century onwards,enabled revolutions in global trade and e-commerce changing how the world works,and bringing us closer together.In more recent years,it has demonstrated its resilience,keeping supply chains moving during Brexit,the global pandemic a

19、nd war in Ukraine.As is clear from the case studies in this report,logistics has continued to innovate and become increasingly efficient,using technology and data to integrate processes,systems and transport modes,and to decarbonise fleets and warehouses.This includes supporting innovation and techn

20、ology adoption amongst small businesses through mentoring;establishing facilities dedicated to the needs of SME sellers;deploying robotics and analytics in distribution centres,as well as autonomous technology and AI to accelerate customer fulfilment;using technology to co-locate and integrate manuf

21、acturing and logistics services;digitalising systems to rapidly accelerate vehicle turnaround times;developing new delivery methods and route optimisation technologies for crowded cities,including with autonomous robots;investing in skills,and delivering the Generation Logistics campaign to attract

22、a diverse range of talent into the sectors future roles.With the right partnership with government,logistics can do much more.As evidenced in this report,if the UK was to return to the World Banks top ten for movement of goods within the country and across its borders,it would see an estimated 3.9 b

23、illion boost in GDP through productivity gains.If the UK were to become a global leader,this benefit would be doubled.However,today,there are pressures pushing in the wrong direction that need to be resolved to unlock the sectors full potential.As identified by the World Bank,the sector has sustaine

24、d its competitive standing in terms of pricing LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 4 but is facing border friction,transport congestion and declining connectivity,and challenges with skills and innovation,all of which is harming the UKs competitiveness in logistics and ove

25、rall economy.We also know that the UK not only needs to address these challenges but to achieve net zero as well.If we get this right,net zero will align with long term higher productivity.However,in the short-term,the levels of investment required,and the fact business models will need to evolve,me

26、an we must ensure that taxpayer and private investment delivers value for money.The sector is investing to decarbonise,and trialling and innovating to reduce emissions in a cost-effective way.The case studies in this report document the sectors introduction of electric vehicles,including HGVs with t

27、he latest battery and range-extending technologies;trialling wireless vehicle charging;deploying electric rather than diesel refrigeration,including solar powered trailers,to maintain the cold chain during distribution;the establishment of micro-mobility hubs to improve sustainability of urban deliv

28、eries;the use of bio-gas HGVs to radically cut emissions;and leveraging the benefits of electric vehicles to reduce vehicle maintenance costs.However,it is clear that challenges remain for how to deliver the transition,especially for larger vehicles making long journeys.So,how do we move forward?We

29、welcome the governments commitment to increase the share of GDP committed to both infrastructure investment and innovation to internationally competitive levels.It is important that this is maintained,and that the UK logistics sector gets its fair share.In addition,the shortage of technical skills m

30、ust be addressed,especially given that new technologies are needed to deliver zero carbon.Finally,border friction must be challenged and the UKs international connectivity invested in.The logistics sector is well placed to support this,sharing best practice across businesses and communities,and depl

31、oying new technologies to boost efficiency,but it cannot do it alone.At Logistics UK we are working with our members to support this challenge including through our partnership with government on Generation Logistics and all our events and forums which seek to bring together the leaders of logistics

32、 with decision makers to share and develop best practice.Logistics will always be a public private partnership.Given the potential for logistics to drive growth across the whole economy,we are calling for policy makers to work closely with us to take the sector forward and support a fair transition

33、to a green economy,and thereby help to solve the UKs productivity puzzle.This means delivering:Innovative and integrated infrastructure leveraging investment and technology to enable the transport network to work more efficiently for every household,business and public service in the country.In the

34、short term,we must tackle the UKs congestion hotspots on road and rail and at ports and airports.In the long term,government and business must work together to deliver a national logistics network that moves goods in the optimum productive,strategic and green way.A fair transition to a green economy

35、.The logistics sector is embracing the decarbonisation agenda and is committed to playing its part to help the UK achieve net zero.However,to deliver a fair transition and unlock private investment,the sector needs support and partnership to mitigate the current high costs of going green,together wi

36、th long-term collaboration to deliver the energy infrastructure required for all freight transport modes.Skills partnerships to support a thriving sector.The logistics sector is investing in recruitment and skills to respond to the rapidly changing needs of businesses,the aging population and LOGIST

37、ICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 5 reduced migration from the EU.To deliver for the future,skills partnerships are required that reflect the breadth of high-quality roles across logistics and how central they are to keeping the country moving.The expansion of trade,as a drive

38、r of innovation and productivity.Logistics enables all international goods trade.That is why we are calling for trade to be backed enthusiastically as a driver of progress.This means the logistics industry and the government working together to deliver simple regulations and borders,including by lev

39、eraging the opportunities of new technologies and artificial intelligence,and negotiating Free Trade Facilitation Agreements and Free Trade Agreements to unlock market access.This is a big agenda but,as evidenced in this report,getting this right would mean a 3.9 billion boost to GDP and enough rais

40、ed in additional taxation to finance the annual salaries of more than 20,000 nurses or secondary school teachers.Going further to become a world leader would double these gains.This is why we are calling for the government to work with us to establish a cross-Whitehall Logistics Productivity Forum,t

41、o maximise the benefits that this sector can deliver to the whole economy.These prizes are too valuable to leave in storage.David Wells OBE Chief Executive Logistics UK LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 6 FOREWORD BY JOHN BOUMPHREY,COUNTRY MANAGER,AMAZON UK Amazon is at

42、its heart a retailer,but if our heart is in retail,our legs and arms are very much in logistics:moving products from our network of over 25 fulfilment centres to customers.When it comes to logistics,we have always asked ourselves how can we do this faster,safer,more sustainably,and more affordably.I

43、ts this approach thats seen us cut delivery times across millions of orders,and increasingly offer same day delivery.At Amazon,we have seen first-hand the huge economic impact that the logistics sector produces.Many of our sites are located in post-industrial areas that have historically experienced

44、 higher rates of unemployment and deprivation,and we therefore know how important relevant investment and job creation can be for local communities across the UK.Effective logistics also enables businesses to serve the whole UK from a single site,anywhere from Cornwall to Caithness.But efficient log

45、istics can also take you beyond just the UK.100,000 UK-based small and medium sized enterprises sell on Amazon,with more than half exporting their products to customers around the world,recording more than 3.3 billion in export sales in 2022 alone.The exporting success of these businesses is only po

46、ssible through the smooth delivery of goods between businesses and customers.Decarbonising logistics will play a significant role in the transition to net zero,and businesses including Amazon are taking action now to address this challenge(introducing electric vans across our network,for example)as

47、well as identifying where further investment and innovation will be required in the future.Amazon has pioneered the introduction of eHGVs to the UKs roads,but there is much work to do in decarbonising our transport network,as well as in other parts of our operations.For all these reasons and more we

48、 are pleased to support this important report from Logistics UK.Amazon is committed towards supporting the future growth of the logistics sector in the UK,and we look forward to achieving this in partnership with both policymakers and the wider business community.John Boumphrey Country Manager Amazo

49、n UK LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 7 TABLE OF CONTENTS Forewords.3 Executive summary.8 1.Background.15 2.The UKs logistics performance.18 3.Understanding the economic impact of the logistics sector.22 4.The economic windfall from improving the UKs logistics performan

50、ce.25 5.Preparing for a net-zero future.30 6.Case studies.35 7.Appendix 1:Literature review.55 8.Appendix 2:Modelling methodology.62 LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 8 EXECUTIVE SUMMARY THE UK FACES A SIGNIFICANT PRODUCTIVITY CHALLENGE Since 2007,UK productivity growth

51、has slowed markedly,and its performance has worsened compared to its international peers.As displayed in Fig.1,between 1997 and 2007,labour productivity grew at a healthy average annual rate of 1.9%annually,well ahead of rates enjoyed by most other countries in the G7.The period since the global fin

52、ancial crisis(GFC)has been marked by persistently sluggish trend improvements in productivity in major advanced economies.The slowdown has,unfortunately,been particularly acute in the UK contributing to its current position as one of the weakest performers in the G7 by the measure of output per work

53、er.1 Fig.1.Annual output per hour worked,1997-2021 Such slow productivity growth has contributed to the stagnation in living standards for UK households that seems set to persist.Oxford Economics baseline forecast for the UK sees little improvement in productivity growth in the medium-term,a project

54、ion that would imply a 20%reduction in productivity by 2030 compared to pre-crisis trends(see Fig.2 overleaf).This trend has,and would continue to have,a deeply damaging impact on prosperity.For example,average real household income has remained largely unchanged since 2007,and the UK Office for Bud

55、get Responsibility predicts that real income per person will still be below pre-pandemic levels in 2027-28.2 UK policymakers are,therefore,confronted with a pressing challenge to enhance productivity growth in the country.1 The UK Office for National Statistics(ONS),“International comparisons of UK

56、productivity(ICP),final estimates:2021”,January 2023(last accessed July 2023).2 The UK Office for Budget Responsibility(OBR),“Economic and fiscal outlook”,March 2023.-20190.0%0.5%1.0%1.5%2.0%2.5%UKRest of G7Source:Office for National StatisticsAverage annual growthLOGISTICS:DELIVERING A

57、 SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 9 Fig.2.UK productivity,Real GDP per worker(indexed,1990=100)LOGISTICS IS ONE OF THE UKS MOST IMPORTANT ECONOMIC SECTORS AND HAS AN IMPACT ON THE WHOLE ECONOMY In 2021,the UK logistics sector contributed 163 billion to the UK economy,that is 7.2%of UK GDP(or

58、12%of UK GVA3 excluding the contribution of the financial sector).The contribution to employment was also of similar magnitude,with around 2.7 million employed in the UK in logistics companies or in logistics roles in other companies in 2021.This means that 8.2%of the UK workforce was employed in lo

59、gistics or logistic-related roles in 2021.Through their supply-chain and wage-spending,logistics businesses support economic activity in other parts of the economy.In 2019,the total economic footprint of the logistics sector was approximately three times larger than its direct GVA contribution one o

60、f the highest among comparator countries and other UK sectors.However,these“demand-side”effects do not capture any downstream dynamic effects or rebalancing that may occur in the economy as the sector evolves.It is therefore important to understand the role the sector plays in catalysing economic ac

61、tivity in the wider economy.Logistics services are used extensively by businesses and the public sector to in supply chain management and product delivery.Our analysis indicates that the public sector and other private sector businesses spent 15%of their total input-related spending on logistics ser

62、vices in 2019.It stands to reason,therefore,that changes to the speed,reliability and price of these services cascade through the economy.Through these channels,the logistics has a considerable effect on the capacity of businesses to produce goods and services i.e.,a supply-side impact.Efficient log

63、istics operations help facilitate market expansion for businesses,resulting in increased sales and driving economic productivity.Furthermore,they empower a broader range of businesses to compete on a wider scale,stimulating market competition and fostering potential improvements in product quality a

64、nd reductions in prices.Increased competition serves as a catalyst 3 Gross Value Added(GVA)is the value of outputs produced less the value of intermediate inputs used in the production process,and is used as a proxy for GDP.90020002005200252030GDP per worker(1990=100

65、)Pre-financial crisis trendSource:Oxford EconomicsGDP per worker,1990=100Forecast LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 10 for heightened innovation,technological investment,and a dynamic reallocation of resources,capitalising on the opportunities arising from improved logis

66、tics.As is evident from the case studies in this report,logistics advancements themselves also require technological progress,and the UK logistics sector is investing in this area.Logistics businesses told us how they were investing in technology to drive efficiency and support supply chains and cus

67、tomers,disseminating innovative practices across the wider economy,as well as investing in the green transition.IN RECENT YEARS,THE EFFICIENCY OF GOODS MOVEMENT WITHIN THE UK AND ACROSS ITS BORDERS HAS DECLINED COMPARED TO INTERNATIONAL PEERS According to international measures,from a position of co

68、mparative strength,the efficiency with which goods can be moved within and across the UK has experienced a relative decline since 2014.A variety of sources provide information relating to the relative quality and efficiency of different countrys logistics services.One of the most prominent is the Wo

69、rld Banks latest Logistics Performance Index(LPI)4,which assesses the quality of logistics services and the context within which logistics businesses operate.In 2014,the UKs international ranking of 4th implied its status as a relative global leader.The latest edition of the LPI this year,however,sa

70、w the UKs ranking plummet to joint-19th,with by far the biggest decline registered during the period between 2018 and 2023(Fig.3).Fig.3.Logistics Performance Index ranking,select countries(2014-2023)Although we are not able to formally quantify the impact of different drivers,the largest contributor

71、s to the UKs positional decline are beyond the control of industry operators,as indicated by compositional analysis.To understand what might have caused the decline in the UKs ranking,it is instructive to consider the varying performance of different sub-component indicators of 4 The World Banks Log

72、istics Performance Index(LPI),measures countries logistics performance across countries,based on factors such as customs processes,infrastructure quality,and timeliness of shipments.The LPI is a survey-based measure,released roughly once every two to three years.GermanyUnited KingdomUnited StatesCan

73、adaFrance01620182023Source:The World Bank,Oxford EconomicsLPI rankingLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 11 the LPI during this period(Fig.4).The largest falls have related to timeliness,infrastructure quality and the quality and efficiency of customs

74、 operations.For the latter,it is notable that the drop coincided with the implementation of the UKs new trading arrangement with the EU27,a change that has brought additional administrative complexities for businesses seeking to transact with partners that still account for 42%of the UKs internation

75、al trade by value.It is also notable that the UK has generally suffered from a low intensity of transport infrastructure investment over the last decadethe UK spent approximately 0.8%of GDP on transport infrastructure during this period.Fig.4.Absolute change in the UKs LPI sub-component scores betwe

76、en 2014 and 2023 In theory,these trends can be expected to have contributed to the UKs relatively weak productivity performance,given the plethora of channels through which logistics services influence business operations.To test this hypothesis,we developed an econometric model that estimated to wh

77、at extent a countrys logistics performance,as measured by the LPI,can independently explain international variation in productivity growth.Our empirical assessment validated this thesisindeed,it implies that UK productivity growth would have been 14.7%higher in 2023 had it not been for the relative

78、decline in logistics performance since 2014.GOING FORWARD,THE LOGISTICS SECTOR CAN PLAY AN IMPORTANT ROLE IN THE UKS RESPONSE TO ITS PRODUCTIVITY CHALLENGE Restoring the UKs position as a global logistics leader can offer an important route to realising the boost to growth that both major political

79、parties aspire to.To crystalise the potential opportunity,this study examines two hypothetical scenarios to illustrate the potential positive economic impacts that could be available.The economic opportunity from returning to the top-10 in logistics We first modelled a hypothetical scenario where th

80、e UK returns to the top-10 in the World Banks LPI rankings by 2025 instead of continuing to decline at the same rate as it did between 2014 and 2023.In this scenario,we estimate that productivity could be 0.13%higher in 2030.This translates into an addition of 3.9 billion to UK GDP,consistent with a

81、n increase in average household disposable income of 80 in todays prices.The increase in tax revenues associated with the increased Overall LPIscoreTimelinessInfrastructurequalityCustomsefficiencyQuality oftransport andcustomsservicesPricing ofinternationalshipmentsAbility to trackand trace-0.7-0.6-

82、0.5-0.4-0.3-0.2-0.10.0Source:The World Bank,Oxford EconomicsChange in scoreLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 12 productivity,of 870 million,could fund salaries of around 20,000 nurses or secondary school teachers in the UK.To put this in context,our modelling suggests th

83、at the productivity gain in this hypothetical scenario would constitute approximately one-eighth of the annual productivity growth projected from 2030 onwards,according to Oxford Economics current baseline forecast.Fig.5.The economic opportunity from returning to the top-10 in logistics Source:Oxfor

84、d Economics The economic opportunity from becoming the global leader in logistics We also modelled a hypothetical scenario where the UK rose to the top of global rankings in 2025 to illustrate the potential rewards if such a transformative achievement is attained.In this scenario,we project that pro

85、ductivity could be 0.27%higher in 2030.To put this into perspective,based on our current baseline forecast,such a boost would increase UK productivity growth by approximately 20%during this period.If realised,such a gain would add 7.9 billion to UK GDP,consistent with an increase in average annual h

86、ousehold disposable income of approximately 160,with these figures measured in todays money,and the tax revenues associated with the increased activity,of 1.8 billion,could fund the salaries of more than 40,000 nurses or secondary school teachers.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVI

87、TY PUZZLE 13 Fig.6.The economic opportunity from becoming the global leader in logistics Source:Oxford Economics The productivity gain stemming from logistics improvements in this hypothetical scenario would constitute approximately one-quarter of the annual productivity growth projected from 2030 o

88、nwards,according to Oxford Economics current baseline forecast.How significant is this productivity boost?Our estimated productivity improvements associated with these hypothetical scenarios are in the same range as the OBRs estimates of the long-term productivity increase associated with the govern

89、ments policies to improve labour supply announced in the Spring 2023 budget.The productivity boost estimated by the OBR associated with these labour market policies,of 0.2%by 2027/28,was the largest upward revision to potential output by the OBR as a result of fiscal policy decisions taken by the go

90、vernment since 2010.5 In contrast,the Spring 2023 budget decision on capital allowances concerning investment is not expected to alter the path of capital stock or potential output in the long run(i.e.,beyond 2025-26)6,whereas the reduction in departmental capital budgets announced in the Autumn 202

91、2 budget was projected to reduce long-term output by 0.1%.7 HOW THESE GAINS COULD BE REALISED:THE IMPORTANCE OF A JOINED-UP STRATEGIC PARTNERSHIP BETWEEN PUBLIC AND PRIVATE SECTORS Our analysis highlights the potential value that can be gleaned by enhancing the UKs logistics performance,by improving

92、 the predictability,timeliness and value-for-money of domestic and international shipments,including through improvements to infrastructure and customs processes and investment in innovation and skills.However,the decline in the UKs performance cannot be reversed by actions taken by logistics busine

93、sses alone.This is especially true given the challenges posed by structural and cyclical factors such as the increase in prices and costs of borrowing and the 5 The UK Office for Budget Responsibility(OBR),“Economic and Fiscal Outlook 2023”,March 2023(last accessed July 2023).6 The UK Office for Bud

94、get Responsibility(OBR),“Economic and Fiscal Outlook 2023”,March 2023(last accessed July 2023).7 The UK Office for Budget Responsibility(OBR),“Economic and Fiscal Outlook 2022”,November 2022(last accessed July 2023).LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 14 associated impacts

95、 on income and investment ability.Behavioural changes since the pandemic and the urgent need to decarbonise further contribute to the complexity of the situation.A collective effort is required,with the government collaborating closely with businesses to ensure that the countrys logistics sector can

96、 operate optimally,thereby bolstering overall economic growth and global competitiveness.Such enhancements will deliver efficiency benefits to the businesses across the UK economy for whom these services underpin a wide range of operational tasks such as supply chain management,connecting with custo

97、mers.Moreover,firms could also benefit indirectly through enhanced labour market efficiency with more effective transport connections helping to improve workforce mobility.In turn,this should engender further dynamic benefits through economies of scale and also result in potential improvements in pr

98、oduct quality and price reductions for consumers.All this suggests that politicians considering how to revive the countrys growth prospects would do well to prioritise measures that can reverse recent trends in the UKs logistics performance.8 8 It is beyond the scope of this study to provide specifi

99、c recommendations on actions to be taken by the government and the industry for improving logistics performance.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 15 1.BACKGROUND The UK faces a significant productivity challenge.Since the financial crisis,the UKs productivity growth has

100、slowed down significantly compared to pre-crisis trends.In the ten years prior to the global financial crisis,labour productivity in the UK grew at 1.6%per year.Since the crisis,between 2010 and 2019,productivity growth slowed down to 0.6%per year.Further,the COVID-19 pandemic and rising energy pric

101、es have adversely affected the economy,and this has further exacerbated the issue,with forecasts indicating that UK productivity in 2030 is likely to be 20%lower than it would have been if the pre-crisis trend growth had continued.The sharp slowdown in productivity growth has contributed to a stagna

102、tion in average living standards,with the impact on UK households intensifying recently due to the cost of living crisis.ONS data shows that average UK real household income is broadly unchanged since 20079 and the UK Office for Budget Responsibility(OBR)is predicting UK households real income per p

103、erson will still be below pre-pandemic levels in 2027-28.10 Fig.7.UK productivity,real GDP per worker(indexed,1990=100)Data from the ONS shows that the average output produced by UK workers is lower than that of other G7 countries except Japan,indicating that the UK needs to act to address this gap.

104、Further,average output produced per hour worked in the G7 countries was 16%above the UK level in 2021.Average 9 The UK Office for National Statistics(ONS),”Average household income,UK:financial year ending 2022”,January 2023(last accessed July 2023)10 The UK Office for Budget Responsibility(OBR),“Ec

105、onomic and Fiscal outlook”,March 2023(last accessed July 2023).900099520002005200252030GDP per worker(1990=100)Pre-financial crisis trendSource:Oxford EconomicsGDP per worker,1990=100Forecast LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 1

106、6 output per worker growth rates in the UK have been among the lowest among this group of comparable countries since 2008,as shown in Fig.8.11 Fig.8.Real GDP per hour worked(2008=100),2008-2021 RESPONDING TO THE PRODUCTIVITY CHALLENGE The government is cognisant of the productivity challenge,and has

107、 identified four key areas to address to help improve productivity,namely,through investment in skills,building an enterprise economy by reducing the burden of tax and regulation,removing barriers to employment,and spreading growth across the country.12 The governments support is critical as busines

108、ses have struggled to improve productivity in the face of recent short-term shocks such as the pandemic and long-term structural changes induced by significant changes to its trade and economic relationship with the EU27.A report by the government-backed charity Be the Business showed that UK busine

109、sses,especially SMEs,lag behind their peers in the biggest developed economies except Japan due to a lack of investment and sluggish improvement in areas such as technology adoption,innovation and operational efficiency.The report also highlighted that UK businesses are hampered by a lack of funding

110、.Around 63%of UK smaller business leaders said their companies were good at implementing new ideas quickly but only 38%said they could access the funds to take those ideas to market,compared with 56%of their US peers.13 11 The UK Office for National Statistics(ONS),“International comparisons of UK p

111、roductivity(ICP),final estimates:2021”,January 2023(last accessed July 2023).12 HM Treasury and the Rt Hon Jeremy Hunt MP,“Chancellor Jeremy Hunts speech at the Centre for Policy Studies”,June 2023(last accessed July 2023).13 Be the Business,“The G7 Productive Business Index:Putting productivity in

112、context”,July 2023(last accessed July 2023).90955009200001920202021CanadaFranceGermanyItalyJapanUKUSSource:Office for National StatisticsAnnual output per hour worked(2008=100)LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 17 THE

113、 ROLE PLAYED BY THE LOGISTICS SECTOR The logistics sector,comprising businesses in the transport,storage and wholesale sectors,could play an important role in addressing the productivity challenge in the UK.The logistics sector plays a critical role in facilitating the movement of goods and services

114、 across the globe.From transport and warehousing to supply chain management,it forms the backbone of modern commerce and trade.Improved logistics creates potential cost savings in the wider economy through various means:by improving reliability and strengthening connections between businesses,betwee

115、n businesses and their customers and helping to mobilise the workforce.Over the long run,these benefits combine to create new economic conditions in the wider economy,which helps businesses access new markets,stimulating market competition,and fostering potential improvements in product quality and

116、reduction in prices.This could catalyse innovation and investment,thereby creating economic value in the wider economy in the long run.AIM AND STRUCTURE OF THIS REPORT In this context,Oxford Economics was commissioned by Logistics UK to assess the role played by the logistics sector in supporting pr

117、oductivity growth in the wider economy.In this report,we present the results from our analysis,which includes quantitative estimates based on an econometric model of the likely productivity boost to the UK economy from an improvement in logistics performance.This report is structured as follows:Chap

118、ter 2 gives an overview of the UK logistics sectors performance focussing on the World Banks LPI;Chapter 3 describes the role of the logistics sector supporting economic activity in the wider economy;Chapter 4 presents the findings of our economic modelling;Chapter 5 provides an overview of the chal

119、lenges faced by the sector in light of the critical transition to net-zero;and Chapter 6 presents case studies describing how logistics businesses are innovating and investing in infrastructure and skills to help other businesses,especially small businesses,become more productive and reduce their ca

120、rbon footprint.Appendix 1 presents a review of the literature on empirically estimating the link between logistics performance and wider economic productivity,whereas our modelling approach and econometric results are presented in Appendix 2.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PU

121、ZZLE 18 2.THE UKS LOGISTICS PERFORMANCE In 2021,the UK logistics sector contributed 163 billion to the UK economy,that is 7.2%of UK GDP or 12%of UK GVA excluding the contribution of the financial sector.The contribution to employment was also of similar magnitude,with around 2.7 million employed in

122、the UK in logistics companies or in logistics roles in other companies in 2021.This means that 8.2%of the UK workforce was employed in logistics or logistic-related roles in 2021.TRANSPORT INFRASTRUCTURE AND INVESTMENT IN THE UK The UKs overall investment in the transport and storage sector as a sha

123、re of GDP has been declining since 2010.In 2010,the UK invested almost 1%of its GDP in this sector,but this had fallen to 0.6%of GDP by 2019 and 0.4%of GDP by 2022.In contrast,all other countries listed in Fig.9 overleaf invested a larger share of their national output in transport and storage since

124、 2019.Fig.9.Transport&storage sector investment,%of national GDP THE RELATIVE DECLINE IN UKS LOGISTICS PERFORMANCE The UKs low levels of investment in infrastructure have manifested in the level and quality of the UKs transport infrastructure.OECD data indicates that the UK ranks behind other Wester

125、n European countries in terms of its road,rail,and maritime transport infrastructure,although its aviation network remains strong.Further,businesses surveyed by the World Economic Forum in 2019 also ranked the quality of the UKs transport infrastructure behind that of other countries.14 14 World Eco

126、nomic Forum,“The Global Competitiveness Report”,2019(last accessed July 2023).0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%20022Source:Oxford EconomicsTransport&Storage investment,%of national GDPLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 19 Another internationally comparative

127、indicator of the quality of logistics services is the Logistics Performance Index(LPI)published by the World Bank.The LPI is a global benchmark that measures countries logistics performance based on six key dimensions,providing insights into the efficiency and effectiveness of their logistics system

128、s,including administrative arrangements supporting logistics.15 The LPI uses data gathered through a survey of logistics professionals and is updated periodically(every two to three years).Fig.10.Logistics Performance Index ranking,2023 The UK ranks joint 19th in the LPI 2023 rankings,significantly

129、behind its European neighbours such as Finland(second),Denmark,Germany,the Netherlands,and Switzerland(joint third),and Austria,15 The six dimensions are:1)customs performance,2)infrastructure quality,3)ease of arranging competitively priced shipments,4)logistics services quality and competence,5)co

130、nsignment tracking and tracing and 6)timeliness of shipments.4.34.24.14.14.14.14444443.93.93.93.93.83.83.73.73.73.73.73.73.7Singapore(1)Finland(2)Denmark(3)Germany(3)Netherlands(3)Switzerland(3)Austria(7)Belgium(7)Canada(7)Hong Kong SAR,China(7)Sweden(7)United Arab Emirates(7)France(13)Japan(13)Spai

131、n(13)Taiwan,China(13)Korea,Rep.(17)United States(17)Australia(19)China(19)Greece(19)Italy(19)Norway(19)South Africa(19)United Kingdom(19)3.43.63.84.04.24.4Source:The World Bank,Oxford EconomicsLPI scoreCountry(LPI ranking in parantheses)LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE

132、20 Belgium and Sweden(joint seventh).Singapore topped the rankings while Hong Kong(joint seventh),the UAE(joint seventh),Japan(joint 13th)and the US(joint 17th)all ranked ahead of the UK,as shown in Fig.10.Moreover,the UKs relative position has deteriorated in recent years(Fig.11),with its ranking s

133、lipping from 4th in 2014 to 19th in 2023.Given the wider economic value that logistics services create for their business users,such a significant relative decline in the countrys logistics performance might have contributed to the UKs relatively disappointing productivity performance over the past

134、decade.Fig.11.Logistics Performance Index ranking,select countries(2014-2023)Although not possible to formally attribute the role of different causes,it is likely that the UKs declining position could be attributed to relatively low investment in transport infrastructure and structural changes in it

135、s trading relationship with the EU27,its primary trading partner.To shed further light on these factors,it is helpful to compare the UKs performance on each aspect of the LPI.Over the period from 2014 to 2023,the UKs LPI score deteriorated across all components.Fig.12 presented below shows the decli

136、ne in scores between 2014 and 2023 for each component.The largest relative decline between 2014 and 2023 was seen in the UKs timeliness and infrastructure scores,which is correlated with reduced investment in transport infrastructure during this period.UK investment in transport infrastructure grew

137、by 0.7%annually between 2016 and 2019 compared to almost 9%per year in Germany over the same time period.16 Notably,the UKs timeliness score demonstrated relative improvement until 2018 but has since declined,coinciding with the UKs departure from the single market and the implementation of 16 OECD,

138、“Transport infrastructure investment and maintenance”,July 2023(last accessed July 2023).GermanyUnited KingdomUnited StatesCanadaFrance01620182023Source:The World Bank,Oxford EconomicsLPI rankingLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 21 additional custom

139、s checks.Even after Brexit,the EU comprised more than 40%of all of UKs trade in 2022.17 Despite the challenges posed by Brexit and rising costs,the logistics sector has managed to sustain its competitive standing between 2014 and 2023,as indicated by its relatively smaller decline in pricing of inte

140、rnational shipments score between 2014 and 2023.The deterioration observed in the UKs logistics performance is likely to have significant implications for the broader economy,with potential long-term consequences.In the next chapter,we delve into the different ways in which the logistics sector infl

141、uences the wider economy.Fig.12.Absolute change in LPI scores,2014-2023 17 IMF,“Direction of Trade Statistics”,February 2023(last accessed July 2023).Overall LPIscoreTimelinessInfrastructurequalityCustomsefficiencyQuality oftransport andcustomsservicesPricing ofinternationalshipmentsAbility to track

142、and trace-0.70-0.60-0.50-0.40-0.30-0.20-0.100.00Source:The World Bank,Oxford EconomicsChange in scoreLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 22 3.UNDERSTANDING THE ECONOMIC IMPACT OF THE LOGISTICS SECTOR A business or sectors economic contribution can be conceived and measured

143、 in different ways.In this section,we introduce and describe two alternatives applied specifically to the logistics industry.DEMAND-SIDE ECONOMIC IMPACT:SUPPLY-CHAIN AND WAGE-INDUCED EFFECTS The economic impact of the logistics sector can be assessed through its total economic footprint,which involv

144、es estimating the effects of three distinct types of expenditures,all of which generate substantial economic activity across the country,as illustrated in Fig.13,and described below:The direct impact:This refers to the economic activity originating from operational spending at various transport and

145、warehouse businesses,retailers,wholesalers,and distributors within the logistics industry itself.The indirect impact:This represents the economic activity supported within the logistics supply chain.It occurs as a result of the industrys purchases of goods and services from other sectors.The induced

146、 impact,or wage expenditure impact:This arises when employees working in the logistics industry and its supply chain spend their wages,contributing to local retail and leisure businesses,among others.The total economic footprint of the UK logistics industry in a particular year is determined by summ

147、ing up the direct,indirect,and induced impacts,measured through GDP and employment for each channel,for that year.Fig.13.Demand-side economic impact channels Source:Oxford Economics LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 23 In 2019,the total economic footprint of the logistic

148、s sector was approximately three times larger than its direct GVA contribution one of the highest among comparator countries and other UK sectors.In comparison,the multiplier18 for the transport sector in the US and Germany is around 2.8x and the UK finance and insurance sectors multiplier is around

149、 2.9x.This demand-side approach measure only captures the in-year economic activity supported by the logistics sector through indirect supply chain and employee spending induced effects.It does not capture any downstream dynamic effects or economy-wide adjustments if the sectors contribution were to

150、 decline.The next step,therefore,is to understand the sectors role in boosting the countrys long term economic potential over time.Our analysis of the UK Input Output tables indicates that the sector underpins all other parts of the UK economy,including private and public sector,with other sectors s

151、pending on logistics services in 2019 comprising close to 15%of their total spending on inputs.19 SUPPLY-SIDE ECONOMIC IMPACT:THE USE VALUE OF LOGISTICS SERVICES In addition to sustaining demand for goods and services in the economy,logistics services are used extensively by businesses and the publi

152、c sector for supply chain management and product delivery.It stands to reason,therefore,that changes to the speed,reliability and price of these services cascade through the economy.Through these channels,the logistics facilitates a considerable effect on the capacity of businesses to produce goods

153、and services i.e.,a supply-side impact.Case studies,in Chapter 6 of this report,provided by logistics businesses we engaged with for this study,showcase how their investments are contributing to increased productivity across the wider economy while upholding sustainability as a key principle.The evi

154、dence collected illustrated the existence of this supply-side impact,implying that improvement to the efficiency of logistics operations lead to cost savings through various channels,help improve reliability and improves connections between businesses,between businesses and their customers and helps

155、 mobilise the workforce.For instance,Freightliner,the largest intermodal freight company in the UK,told us how they adopted a range of integrated digital systems that helped accelerate vehicle turnaround times by 50%which,they estimate,provided a financial benefit to consumers of 3 million per year.

156、Over the long run,the cost savings and improved connectivity benefits combine to create new economic conditions in the wider economy.A description of these benefits,drawn from a detailed literature review(summarised in the Appendix 1),are presented in Fig.14 overleaf.Efficient logistics operations h

157、elp facilitate market expansion for businesses,resulting in increased sales and driving economic productivity.Furthermore,they empower a broader range of businesses to compete on a wider scale,stimulating market competition and fostering potential improvements in product quality and reductions in pr

158、ices.Evri,a parcel company,told us how their warehousing 18 A multiplier,in this context,is the ratio of the total GVA contribution(i.e.,direct GVA contribution and GVA supported through supply-chain and wage-induced spending)to the direct GVA contribution.A multiplier of x indicates that every 1 of

159、 GVA generated by the transport and storage sector supports x of GVA across the entire national economy.19 Office for National Statistics,“UK input-output analytical tables,industry by industry”,March 2023(last accessed May 2023).LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 24 serv

160、ices provide small and medium businesses(SMBs)with flexible scalability,allowing them to swiftly adapt to shifting demands and avoid excessive costs during lulls.For instance,family-operated Flintoft Ironmongers attributed a significant increase in their online sales and parcel volumes to their use

161、of Evris bespoke warehousing and delivery solutions.Increased competition serves as a catalyst for heightened innovation,technological investment,and a dynamic reallocation of resources,capitalising on the opportunities arising from improved logistics.Logistics businesses supporting our research tol

162、d us how they are working with businesses,especially SMBs,helping them innovate to become more productive.For example,Amazons Innovation Accelerator program offers SMBs hands-on experience in its state-of-the-art fulfilment centres,fostering growth and innovation through technology adoption and coll

163、aboration.Fig.14.How logistics improves productivity Logistics advancements themselves also require technological progress,for example,through automation and data analytics.Such advancements often spill over beyond the logistics sector to the wider economy,enabling greater efficiency across various

164、industries such as manufacturing and retail.Retailers,such as Amazon,the John Lewis Partnership and Tesco,as well as food and beverage companies,such as Nestl,which have large logistics operations or partner with logistics businesses(such as Volvos partnership with Tesco),told us how they have been

165、investing in their operations leveraging advanced digital technologies.For example,Nestls new distribution centre in Leicestershire uses sophisticated robotics,automated sorting systems,and intelligent analytics to deliver fast,efficient distribution of the high volume of retail products.DPD have de

166、scribed how they are planning to roll out robot deliveries to 10 UK towns and cities following a successful trial in Milton Keynes.Logistics UK,in partnership with the Department for Transport(DfT),are also working to disseminate learnings in the areas of AI-powered software and cyber security,throu

167、gh their Generation Logistics programme,highlighting the breadth of skills that the sector is investing in to deliver today and in the future.Royal Mail also described how they have trained over 350 technicians to work on Electric Vehicles(EVs),providing them with transferable skills for the future

168、low-carbon workforce.The enhanced efficiency thus created across various sectors helps improve the long-term productive capacity of the economy.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 25 4.THE ECONOMIC WINDFALL FROM IMPROVING THE UKS LOGISTICS PERFORMANCE The existence of such

169、 supply-side benefits implies that enhancing logistics performance could play a pivotal role in addressing the UKs productivity challenge.In this section,we present insights from modelling work in which we quantified the value that would be associated with improvements to the UKs logistics performan

170、ce.SCENARIO DESIGN AND MODELLING APPROACH As described in Chapter 2,between 2014 and 2023,the UKs relative logistics performance,as measured by the LPI,experienced a notable decline,which is likely to have contributed to the countrys relatively poor productivity performance during this period.To ass

171、ess the benefits associated with reversing this trend,we have modelled the impact of two hypothetical scenarios:Firstly,we model a scenario where the UK manages to retain its position within the top-10 global rankings instead of declining further.We explore a second hypothetical scenario where the U

172、K achieves a far more significant improvement in logistics performance,raising it to the top of the global rankings.Our scenario forecasts are underpinned by insights gathered through the estimation of an econometric model spanning the period between 2005 and 2021.This indicated that a one point inc

173、rease in the LPI is associated with an 0.12%increase in labour productivity in the short run and 0.45%in the long run.The methodology box overleaf summarises the modelling approach but,for interested readers,a more detailed description can be found in Appendix 2.SUMMARY METHODOLOGY Our modelling app

174、roach builds on studies referenced in the previous chapter,as well previous Oxford Economics analyses of UK productivity.20 We have employed a three-step approach described and illustrated below.(1)First,we undertook a set of background research tasks that informed our approach and laid the foundati

175、on for subsequent work.This included a detailed review of available literature and the collection and cleaning of various datasets that were required for our econometric modelling work.(2)Next,we used this dataset to estimate an econometric model which aimed to explain variation in productivityboth

176、between different countries and over timebased on a set of economic drivers including LPI.20 Oxford Economics,“Supply-side problems exacerbating economic difficulties in the UK”,December 2022.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 26 (3)Finally,we applied the estimated relati

177、onships between LPI and productivity from our model to our two hypothetical scenarios to demonstrate the extent to which UK productivity could increase in these scenarios.Fig.15.Three-step research approach Data sources We constructed a comprehensive dataset comprising variables that could influence

178、 productivity,including investment,population,R&D spending,trade,exchange rates,tariffs,the CIF-FOB margins(a proxy for maritime logistics costs),FDI,and indicators for economic and political risk,corruption,physical and intellectual property rights.Historic data for each variable was sourced from a

179、 combination of proprietary and publicly available datasets.A list of the data used in the modelling and the corresponding sources is provided in Appendix 2.THE ECONOMIC OPPORTUNITY FROM RETURNING TO THE TOP-10 IN LOGISTICS In the first scenario,we assume that the UK returns to the top-10 in the Wor

180、ld Banks LPI rankings by 2025 instead of continuing to decline at the same rate as it did between 2014 and 2023.Assuming no change in other countries LPI scores,a return to the top-10 for the UK implies an 8%increase in its LPI score translating into a jump up of 10 places in the rankings a challeng

181、ing ask within the next two years.Based on our analysis,if the UK can regain its position in the top-ten global rankings for logistics performance by 2025,we estimate that UK productivity would be 0.13%higher in 2030.If realised,such a gain would add 3.9 billion to the UKs GDP in 2030,consistent wit

182、h an increase in average annual household disposable income of around 80 in 2030,with figures measured in todays money.The amount of taxes generated through the increased economic activity in this scenario could finance the annual salaries of 20,000 nurses or secondary school teachers in the UK(assu

183、ming salaries remain constant in real terms and no change in the tax system).21 21 Based on a gross annual salary in 2022 for a secondary education teaching professional of 41,722 and for nurses of 39,135 gross per annum.ONS,2023.Annual Survey of Hours and Earnings.Background researchData collection

184、 and cleaningEconometric modellingStatistical testing of different model specificationsPost-estimation robustness checksScenario analysisEstimating the increase in productivity in the two hypothetical LPI-based scenarios.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 27 To put this i

185、n perspective,based on our current baseline forecast,such a boost would increase UK productivity growth by approximately 10%during this period.Fig.16.The economic opportunity from returning to the top-10 in logistics Note that this scenario is hypothetical and is meant to illustrate the size of the

186、economic opportunity from returning to the top-10 in global LPI rankings in the next two years.It is beyond the scope of this report to comment on the amount or nature of investment or policy measures required,but broadly such actions should aim to address the predictability,timeliness and value-for

187、-money of domestic and international shipments,including through improvements to infrastructure and customs processes and investment in innovation and skills.THE ECONOMIC OPPORTUNITY FROM BECOMING THE GLOBAL LEADER IN LOGISTICS To highlight the importance of logistics,we have also modelled a hypothe

188、tical scenario where the UK rises to the top of the World Banks LPI rankings by 2025 instead of continuing to decline at the same rate as it did between 2014 and 2023.Becoming the highest ranked country implies an 16%increase in the LPI score translating into a jump up of 19 places in the rankings.3

189、.53.73.94.14.34.52002320252030UK historical trend(projected for 2025)Return to top-10 in 2025Source:Oxford EconomicsLPI scoreScenario3.9 billion Estimated GDP boost in 2030(2023 prices)through productivity gains if the UK returns to the top-10 in LPI rankings.LOGISTICS:DELIVERING A SOLUTI

190、ON TO THE UKS PRODUCTIVITY PUZZLE 28 Fig.17.The economic opportunity from becoming the global leader in logistics In this hypothetical scenario,if transformative investments were made in UK logistics,leading to the UK rising to the top of global rankings by 2025,we project that UK productivity would

191、 be 0.27%higher in 2030.To put this in perspective,based on our current baseline forecast,such a boost would increase UK productivity growth by approximately 20%during this period.If realised,such a gain would add 7.9 billion to UK GDP,consistent with an increase in average annual household disposab

192、le income of approximately 160,with these figures measured in todays money.The amount of taxes generated through the increased economic activity in this scenario could finance the annual salaries of more than 40,000 nurses or secondary school teachers in the UK(assuming salaries remain constant in r

193、eal terms and no change in the tax system).22 Note that this scenario is hypothetical and is meant to illustrate the size of the economic opportunity from being a global leader in logistics.HOW SIGNIFICANT IS THIS PRODUCTIVITY BOOST?For context it is also instructive to compare these estimates with

194、the expected impact of other policy measures introduced by the government in recent years.For example,the OBR projected that the governments policies to improve labour supply in the 2023 Spring Budget will boost long-term GDP by 0.2%in 2027/28,and is likely to persist going forward.This was the larg

195、est upward revision to potential output by the OBR due to fiscal policy decisions taken by the government since 2010.23 In contrast,other decisions announced by the government in the 2023 Spring Budget,such as the decision to let firms reduce their taxable profits by their investment spending on pla

196、nt and machinery 22 Based on a gross annual salary in 2022 for a secondary education teaching professional of 41,722 and for nurses of 39,135 gross per annum.ONS,2023.Annual Survey of Hours and Earnings.23 The UK Office for Budget Responsibility(OBR),“Economic and Fiscal Outlook 2023”,March 2023(las

197、t accessed July 2023).3.53.73.94.14.34.52002320252030UK historical trend(projected for 2025)Rising to global leaders in 2025Source:Oxford EconomicsLPI scoreScenario7.9 billion Estimated GDP boost in 2030(2023 prices)through productivity gains if the UK rises to the top of the LPI rankings

198、 LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 29 for three years from April 2023,are not expected to alter the path of capital stock or potential output in the long run(i.e.,beyond 2025-26).24 Looking further back,the reduction in departmental capital budgets from 2025-26 in the Au

199、tumn 2022 Budget was expected to reduce public investment,resulting in a projected 0.1%decline in UK GDP.An extensive analysis examining the productivity impacts linked to various fundamental technologies,ranging from electricity and steam technologies to broadband and mobile telecommunications,reve

200、aled an average increase of approximately 0.24%to 0.28%per year in the long run attributed to the adoption of these technologies.25 In this context,the economic opportunity presented by enhancing logistics performance in the UK,as illustrated by the two hypothetical scenarios in this section,can be

201、considerable.24 The UK Office for Budget Responsibility(OBR),“Economic and Fiscal Outlook 2023”,March 2023(last accessed July 2023).25 Australian Government,Department of Communications and the Arts,“Impacts of 5G on productivity and economic growth”,April 2018(last accessed July 2023).LOGISTICS:DEL

202、IVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 30 5.PREPARING FOR A NET-ZERO FUTURE Reversing the decline in LPI rankings witnessed over the past decade poses a formidable challenge considering the UKs macroeconomic situation,especially in light of the recent labour and skills shortages,and the c

203、urrent climate of high inflation and high costs of borrowing.Logistics businesses,especially the transport sector,are having to adapt and invest to overcome the challenges posed by behavioural changes following the pandemic,Brexit,and the energy price shock.On top of these,one of the most critical c

204、hallenges facing the sector is the need to decarbonise and become net-zero by 2050,in line with UK governments requirement26.The urgency of the task is widely acknowledged and requires significant efforts across the economy,but particularly from the transport sector which is one of the largest contr

205、ibutors to UK greenhouse gas(GHG)emissions as shown in Fig.18.Total UK greenhouse gas(GHG)emissions(residence basis)in 2022 were just over 400 million tonnes of carbon dioxide equivalent(Mt Co2e),of which the transport sector contributed more than a quarter(i.e.,113 mt Co2e).27 Logistics businesses

206、hold a vital role in curbing these emissions,as a considerable portion of GHG emissions stems from the transport services they provide.For example,18%of domestic transport GHGs were from HGVs,domestic shipping accounted for around 5%of GHGs in 2019,and rail freight emitted 1.4%of UK emissions in 202

207、0.28 Fig.18.Transport sector contribution to GHG emissions in the UK 26 HM Government,“Net Zero Strategy:Build Back Greener”,October 2021(last accessed July 2023).27 Department for Energy Security and Net Zero and Department for Business,Energy&Industrial Strategy,“Provisional UK greenhouse gas emis

208、sions national statistics 2022”,March 2023(last accessed July 2023).28 UK Department for Transport,“Future of Freight:A long-term plan”,June 2022(last accessed July 2023).0%5%10%15%20%25%30%258042005200620072008200920001620

209、0202020800Mt Co2e%of UK totalSource:DESNZ(formerly BEIS),Oxford EconomicsMt Co2e%of UK totalLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 31 According to the Climate Change Committees(CCC)Sixth Carbon Budget,published in 2020,surface transport,aviati

210、on,and shipping together contributed 28%of the total emissions(142 mtCo2e out of approx.500 mtCo2e)as shown in Fig.19 overleaf.Fig.19.Share of emissions by element,2020 Note that both the Department for Energy Security and Net Zero(DESNZ)29 and the CCC statistics imperfectly illustrate the GHG contr

211、ibutions of logistics businesses.Some of the contribution of the manufacturing and construction sector is associated with the logistics sector,relating to wholesale and warehousing businesses,as well as to other transport businesses,or the sectors investment in constructing facilities.At the same ti

212、me,most of the surface transport,aviation and,to a lesser extent,shipping contributions are associated with non-business uses.For example,passenger car journeys accounted for 78%of vehicle-kilometres travelled and 61%of emissions in the UK in 2020.30 As shown in Fig.18,the transport sector has been

213、broadly reducing its GHG emissions in the last two decades,but its share of UK GHG has continued to increase.According to the CCC,the sector faces a daunting task in meeting the net-zero targets.Given its high share,the surface transport sector is also required to reduce emissions by the largest amo

214、unt to reach net-zero,along with manufacturing and construction.The three transport elements(surface transport,aviation and shipping)will have to reduce emissions by 22%by 2030 and by 66%by 2040 relative to their 2020 levels.This will involve significant investment going forward in new technologies,

215、business models and encouraging behavioural change,and the logistics sector,as a major user and also innovator in the transport space,is required to play a major role in the transition.29 Note that the Department for Business,Energy and Industrial Strategy(BEIS)was split in 2023 to form the Departme

216、nt for Business and Trade(DBT),the Department for Energy Security and Net Zero(DESNZ)and the Department for Science,Innovation and Technology(DSIT).30 Climate Change Committee,“The Sixth Carbon Budget:Surface Transport”,2020(last accessed July 2023).Surface transport23%Aviation3%Shipping2%Res buildi

217、ngs14%M&C13%Agriculture11%Electricity supply10%Fuel supply8%Waste6%Others9%Source:Climate Change CommitteeShare of total emissionsTotal emissions:497 mtCo2eLOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 32 For example,one prominent challenge lies in establishing the infrastructure re

218、quired for a seamless transition to zero-emission road freight vehicles,while also bolstering hauliers confidence in the accessibility of charging or alternate refuelling facilities(e.g.,for hydrogen fuel)comparable to the convenience of refuelling with petrol or diesel.To address this,the governmen

219、t has pledged 1.3 billion to install public charging points.Although the number of public charging points grew significantly from 2016 to 2020,reaching 21,000 in 2020,this accounts for less than 10%of the anticipated demand for public charging points by 2030 and is targeted primarily at cars rather

220、than larger vehicles required for logistics purposes.In this context,Volvo Trucks told us about their ambitious plans to achieve net-zero by 2040 through significant investments in the development of electric and hydrogen-fuelled trucks,but highlighted the lack of public charging infrastructure as a

221、 key risk to their ambitions.According to the CCC,up to 270,000 public charging points,for both personal and commercial uses,will need to be installed by 2030,a considerable increase from the 25,000 available in June 2020.31 Further,as is exemplified in the case study provided by UPS,a collaborative

222、 approach involving public and private entities can help logistics businesses facilitate solutions,especially for urban areas,from incorporating deliveries into planning,identifying spaces for warehousing locations and supporting the switch to electric vehicles.Fig.20.Pathway to net-zero emissions(B

223、alanced Net Zero Pathway scenario)COSTS ASSOCIATED WITH DECARBONISING THE LOGISTICS SECTOR The upfront investment required to achieve these ambitious net-zero goals is substantial.Various projections provide an understanding of the scale of the challenge.According to the CCC,investment across the UK

224、(not just the logistics sector)will need to increase to approximately 50 31 The UK Office for Budget Responsibility(OBR),“Fiscal risks report”,July 2021(last accessed July 2023).020406080202022420252026202720282029203020334203520362037203820392040204442045

225、20462047204820492050Surface transportAviationShippingRes buildingsM&CAgricultureElectricity supplyFuel supplySource:Oxford EconomicsProjected pathway for emissions(mtCo2e)LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 33 billion per year by the late 2020s,and this level of funding mu

226、st be sustained until 2050.32 Logistics businesses will need to invest heavily to meet the government mandated,and societally critical,targets.Logistics businesses we partnered with for this study described how they have been making significant investments to improve their capacity and efficiency wh

227、ile reducing their carbon footprint.For example,Amazon is actively pursuing decarbonisation through sustainable delivery methods such as the introduction of electric heavy goods vehicles(eHGVs)and establishing micro-mobility hubs for urban deliveries.Similarly,Asdas substantial fleet of 575 bio-gas

228、trucks has already contributed to a significant carbon reduction of 175,000 tonnes,whereas Tescos trials of electric refrigeration units in their delivery fleets in Peterborough,completed in April 2023,is estimated to decrease CO2 emissions by 500 tonnes.Logistics businesses have also been partnerin

229、g with food and beverage manufacturers to help reduce their carbon footprint from logistics operations.For example,DHL and Mars UKs newly established advanced fulfilment and distribution sites are expected to augment Mars warehousing capacity by 50%while concurrently lowering their logistics-related

230、 UK carbon footprint by 16%.Other retailers with significant logistics operations,such as the John Lewis Partnership and Tesco,have also told us about their plans to invest in decarbonisation by transitioning to EVs in the coming years.While logistics businesses will shoulder a significant portion o

231、f these investment costs,the wider economy stands to benefit as well.It is essential to recognise that these benefits may not be immediately realised by the organisations undertaking the investments,and according to the CCC,they might not always fully offset the financial costs incurred,as evidenced

232、 by several studies that have found material positive social externalities from decarbonisation investment.33,34 At the same time,these costs incurred to decarbonise may have to be passed on to customers through an increase in transport fees and warehousing costs,which may lead to an economy-wide in

233、crease in prices,impacting demand and overall economic growth.Additionally,supply chain disruptions and delays during the transition process,combined with reduced investments in other areas can further hinder productivity gains and innovation in the economy in the short run.However,in the long run,w

234、hile adaptation is costly in the short term,there remain significant upsides to the economy and welfare in the long-term.35,36 Amidst the climate emergency,the shift towards net-zero is critical,and logistics businesses have been investing significantly in innovative technologies and processes for d

235、ecarbonisation.This report 32 Climate Change Committee,“Sixth Carbon Budget”,December 2020(last accessed July 2023).33 Godnez-Zamora,Guido,Luis Victor-Gallardo,Jam Angulo-Paniagua,Eunice Ramos,Mark Howells,Will Usher,Felipe De Len,Andrea Meza,and Jairo Quirs-Torts.Decarbonising the transport and ene

236、rgy sectors:Technical feasibility and socioeconomic impacts in Costa Rica.Energy Strategy Reviews 32(2020):100573.34 Bitencourt,Leonardo,Tiago P.Abud,Bruno H.Dias,Bruno SMC Borba,Renan S.Maciel,and Jairo Quirs-Torts.Optimal location of EV charging stations in a neighborhood considering a multi-objec

237、tive approach.Electric Power Systems Research 199(2021):107391.35 Dietz,Simon,and Bruno Lanz.Growth and adaptation to climate change in the long run.(2019).36 Mujtaba,Ghulam,and Syed Jawad Hussain Shahzad.Air pollutants,economic growth and public health:implications for sustainable development in OE

238、CD countries.Environmental Science and Pollution Research 28(2021):12686-12698.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 34 emphasises the significance of recognising the opportunities in aligning the logistics sectors future with the UKs productivity challenge.By aligning the l

239、ogistics sectors future with the response to the UKs productivity challenge,opportunity exists to transform the sector into a zero-emission powerhouse for the wider economy.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 35 6.CASE STUDIES In this section,we present case studies that s

240、howcase how businesses are investing in technology-driven logistics infrastructure that fosters efficiency,supports the transition to net-zero,while also facilitating the wider dissemination of knowledge and skills.All case studies were provided by Logistics UK and its member businesses.LOGISTICS:DE

241、LIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 36 CASE STUDY:AMAZON INVESTMENT IN FULLY ELECTRIC HEAVY GOODS VEHICLES ACROSS THE UK FLEET In 2022,Amazon launched nine electric Heavy Goods Vehicles(HGVs)in its delivery fleet for the first time in the UK.Of these,there are five 37-tonne fully elec

242、tric vehicles operate from Amazons fulfilment centres in Tilbury and Milton Keynes,transporting customer packages with zero tailpipe emissions and using battery power.The five vehicles replace diesel HGVs,resulting in up to 100,000 annual road miles fuelled with renewable electricity instead of dies

243、el,preventing 170 tonnes of CO2e from being emitted.Amazon subsequently introduced four 7.5tn electric HGVs,joining more than 1,000 electric delivery vans in the UK.Using the latest innovations in battery technology,the electric trucks are using fast 360 kW electric charging points at Amazons Tilbur

244、y and Milton Keynes sites,allowing trucks to charge in two hours.Amazon plans to invest more than 1 billion over the next five years to further electrify and decarbonise its transportation network across Europe,delivering packages to customers more sustainably.This investment is intended to drive in

245、novation across the industry and encourage more public charging infrastructure,which will help enable the broader transportation industry to more quickly reduce emissions.Currently,Amazon has thousands of electric vans delivering packages to customers across Europe and with this investment expects t

246、o grow its fleet to more than 10,000 by 2025.In addition,Amazon has launched micro-mobility hubs in more than 20 cities across Europe,including London,Munich and Paris,and expects to double that figure by the end of 2025.Micro-mobility hubs are smaller,centrally located delivery stations.In Europes

247、traditionally dense cities,the hubs enable Amazon to operate new delivery methods,such as e-cargo bikes and on-foot deliveries,to bring packages to customers more sustainably.Micro-mobility hubs take traditional delivery vans off the road,which alleviates traffic congestion in city centres and impro

248、ves air quality.Amazon is using its size and scale to help spark the scaling of eHGV production so Amazon and others can more quickly transition away from diesel trucks.Amazon expects to purchase and roll out more than 1,500 eHGVs in its European fleet in the coming years.LOGISTICS:DELIVERING A SOLU

249、TION TO THE UKS PRODUCTIVITY PUZZLE 37 CASE STUDY:AMAZON NEW INNOVATION ACCELERATOR TO SUPERCHARGE THE GROWTH OF SMALL BUSINESSES In July 2023,Amazon launched an exciting new initiative that is designed to show small businesses first-hand how it innovates,by taking them inside its state-of-the-art r

250、obotics fulfilment centres across the UK.The Amazon Innovation Accelerator combines the expertise of Amazon,Amazon Web Services,The Growth Company and Made Smarter,which is a government-backed initiative that helps local manufacturing small businesses overcome operational challenges through digital

251、technologies.Through a series of free workshops and one-to-one mentoring,the accelerator programme provides a unique opportunity for small businesses to see in-person how Amazon embraces new technologies and applies innovation to scale up.The accelerator programme will feature expert insights and pr

252、actical advice from Amazons own team on topics that are highly relevant towards nearly all small business growth and productivity prospects,including technology adoption,leadership,and management.David Probert,Business Development Director at Seddon Plant&Engineers,is participating in the accelerato

253、r programme and said:“I believe that every day is a school day.Its great to learn from Amazon and see what we can apply to our business.Its a challenge every day to be more innovative and supply our customers with different products and solutions.One of the things Ive learned already is that no matt

254、er what size your business is,so much depends on the culture that you foster within it and how you engage with people.Were a much smaller business than Amazon,but theres still things that we can learn and apply.”“This programme will encourage growth and innovation within the businesses,”said Ruth Ha

255、ilwood,Organisational and Workforce Development Specialist at Made Smarter.“What businesses will see during this programme is the art of the possible in how Amazon goes about things.Amazon has over 100 sites across the UK,including more than 25 UK fulfilment centres and corporate offices in six citi

256、es.In 2022,Amazon invested more than 1.6bn in infrastructure as it continues to fit out its fulfilment centres with the latest robotics technology.This investment also indirectly supports a network of over 100,000 UK-based small and medium-sized enterprises sellers who sell their products in Amazons

257、 stores across the world.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 38 CASE STUDY:VOLVO TRUCKS CHOOSE ELECTRIC,WITH CONFIDENCE Sustainability-driven innovation is the key to achieving net-zero in the logistics sector and that is the approach Volvo Trucks is applying to its ongoin

258、g product development.By leveraging lessons learned through early electrification within the bus sector,Volvo Group has been able to develop a pioneering battery electric truck portfolio.This is already capable of meeting the needs of the 45%of goods transported in Europe today,which travel less tha

259、n 300km by road the current range of its heavy-duty electric trucks.Crucially,Volvo has achieved this while continuing to develop its diesel and gas engine ranges,and whilst progressing the development of hydrogen-powered fuel cell trucks which will launch in the second half of this decade.No Flash

260、in the Pan Battery electric is not just the here and now for Volvo Trucks it is making significant long-term investments throughout the value chain to ensure ongoing success for its customers.Its track record includes:Delivering its first electric truck into a customer fleet in 2019 Leading todays g

261、rowing electric truck market,with more than 4,300 units sold across 38 countries Becoming the first major truck manufacturer to produce electric vehicles using fossil-free steel A commitment to build its own battery modules in Ghent,Belgium by 2025,allowing for rapid innovation,shorter lead times an

262、d increased circularity Combined,these achievements are helping Volvo Trucks to accelerate its aim for 50%of global sales of new trucks to be electric in 2030,and 100%to be net-zero by 2040.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 39 However,to achieve the UKs ambitious road tr

263、ansport decarbonisation targets,greater investment is required from Government in public charging infrastructure.With this in place,more fleets will be able to make the switch to zero tailpipe emission transport.Youve Got the Power Volvo Trucks customers across Europe are already able to test,order

264、and deploy the manufacturers comprehensive electric line-up,from 16 to 44-tonnes.Through regular demonstrations and events,all stakeholders from the smallest to the largest fleets can try its full electric truck range first-hand and speak to experts on how electrifying road transport can work for th

265、eir business.Volvo Trucks is also committed to supporting customers through its consultative approach,with a simple four-step process to make the transition straightforward:1.Guidance on defining the business case for electrification based on each customers own operation,goals and ambitions 2.Suppor

266、t with framing operational requirements and elaborating on variables like energy consumption,load capacity and operating hours 3.Presentation of a complete solution that fits including proven vehicles,competitive finance,charging plans and equipment,plus the fleet management services that will help

267、to maximise range and secure deliveries 4.Delivering complete trucks,backed by proactive repair&maintenance packages,fulfilled by electric-trained service staff ensuring your new fleet is ready to roll Roger Alm,President of Volvo Trucks,says:“The trend is clear:many of our customers are now startin

268、g their own shift to electric.We intend to be the catalyst for this transition.We now have a product portfolio that can cover most types of transportation for all kinds of fleets.We see it as our mission to support our customers in making that happen.”LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODU

269、CTIVITY PUZZLE 40 CASE STUDY:VOLVO TRUCKS AND TESCO PARTNERING TO DECARBONISE Volvo Trucks worked in partnership with Tesco to deliver a fully electric tractor unit for deployment within the customers distribution fleet,in line with its ambitions to achieve net-zero carbon emissions by 2035.During i

270、nitial consultations,it was agreed that the new truck needed to:Be delivered into service by summer 2023 Match the same levels of performance and reliability as Tescos diesel fleet Seamlessly slot into the fleet rotation at Tescos Thurrock distribution centre,being used for store deliveries in the S

271、outh East Deliver an enjoyable and comfortable driving experience,backed by connected technology The Volvo Solution Volvo Trucks proposed an FM Electric 4x2 tractor unit,plated at 40-tonnes gross vehicle weight,and featuring:Three electric motors,generating 2,400 Nm of continuous torque Its popular

272、automated I-Shift transmission An intelligent electromobility traction control system A driving range of approximately 300km A charging time of just 2.5 hours with a 250kW DC charger,and the option to rapidly charge to 80%capacity mid-shift LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZ

273、ZLE 41 The specification selected delivers an intuitive and intelligent driving experience.For instance,the I-Shift gearbox constantly evaluates information about speed,weight,road grade and torque demand,enabling a smooth and ultra-quiet driving experience.To maximise driving efficiency and range,t

274、he onboard electromobility traction control system proactively manages output on slippery surfaces,while different drive modes are available to set the desired performance,comfort,and energy usage levels,allowing Tesco to tailor its truck to specific driving environments and conditions.The Results T

275、he new truck which marks the first zero tailpipe emission tractor unit Volvo has delivered into service with a UK supermarket has immediately slotted into the customers day-to-day operations,and proven able to tackle any expected assignment effectively.The range and on-site charging solution has pro

276、ved more than enough to cover Tescos operational requirements,with the vehicle running double shifts.Looking ahead,Government investment in public charging infrastructure for HGVs will enable more fleets to deploy battery electric trucks and extend operations beyond back-to-base missions.Christian C

277、oolsaet,Managing Director of Volvo Trucks UK&Ireland,says:“Our new Volvo FM Electric is the perfect solution for high-capacity grocery deliveries with less environmental impact,and its fantastic to see the first example enter service with Tesco.This model is ideal for supermarket fleets wanting to t

278、ransition to battery electric trucks,and were very confident its going to generate a lot of interest on the road.”Tesco expects its new acquisition to cover approximately 70,000 miles annually.It will be serviced and maintained by the local Volvo Trucks dealership.LOGISTICS:DELIVERING A SOLUTION TO

279、THE UKS PRODUCTIVITY PUZZLE 42 CASE STUDY:ASDA DECARBONISING LOGISTICS AND DEVELOPING AUTONOMOUS SOLUTIONS Asda Logistics Services is a hub of activity for the retailer,with 42 operations nationwide including 20 food depots;three clothing centres;two ambient hubs;two import centres;one national sort

280、ing centre;five online fulfilment centres and nine ASCs.The business processes a high volume of product in 2022 they delivered 1.5 billion cases with more than 12,500 colleagues working across the distribution function.Bio-gas HGVs are a fast and cost-effective way to decarbonise logistics.Asda curr

281、ently operates 575 bio-gas trucks the largest fleet in the UK and aims to operate almost 1,000 trucks,whilst launching a further 10 biogas stations by 2024.Bio-gas trucks have already reduced Asdas carbon impact by c.175,000 tonnes.As part of their journey to Net Zero,Asda is also transitioning home

282、 delivery vans from diesel to electric.The business aims to convert all 3,000+home delivery vans to battery by 2028,with parallel capital investment in charging points at stores.Asda is the UKs second largest online supermarket,with over 20%of the market and more than 800,000 weekly orders.This chan

283、ge is projected to reduce over 54,000t of CO2 emissions annually,and helps deliver on Asdas goal to eliminate diesel vehicles entirely from its grocery home delivery fleet by 2028.To deliver innovation within the sector,Asda has partnered with Wayve,the British self-driving start-up,to begin the UKs

284、 largest autonomous grocery home shopping delivery trial,providing groceries to a catchment area of more than 403,480 residents across 189,510 households.Wayves autonomous vehicles technology has been integrated into Asdas current online delivery system at the Park Royal superstore in West London.Cu

285、stomers can place next-day delivery orders online,choosing from the full range of online products and selecting a delivery slot that suits them,the only difference is that they could be randomly selected to have their order delivered in a self-driving vehicle.Wayves AV2.0 solution uses machine learn

286、ing to train its AI software to learn from experience how to drive in any environment.This results in autonomous technology that is not geo-fenced or limited to pre-defined routes and can autonomously drive anywhere.The system is designed to constantly monitor the road,identifying potential hazards,

287、and making the safest decisions possible.LOGISTICS:DELIVERING A SOLUTION TO THE UKS PRODUCTIVITY PUZZLE 43 CASE STUDY:DHL AND MARS UK INVESTMENT IN THE LONDON THAMES GATEWAY DHL and Mars UK have opened a new state-of-the-art fulfilment and distribution centre which will serve London and the Southeas

288、t region.The London Thames Gateway site is home to a world class logistics network that is sustainable,smart,and agile.Standing at 42 meters high,the new facility is one of Europes largest distribution centres.World class automated pallet storage and retriin Leicestershire.The 638,000-square-foot facility includes advanced solutions that were customised by Swisslog Logistics Automation and integrated with GXOs digital warehouse ecosystem.The operations use sophisticated robotics,automated sorting systems,and GXOs intelligent analytics to deliver fast,efficient distribution of the high volume of retail products associa