Asaf Curelaru, Operations Director for UK & Ireland at Exotec
The UK risks falling behind European competitors unless it introduces more targeted incentives to help warehouses invest in automation, according to logistics technology firm Exotec.
The company says Italyā€™s use of tax credits for advanced machinery and robotics offers a model Britain could follow as warehouse operators grapple with labour shortages, rising costs and pressure for faster fulfilment.
Automation investment is accelerating across Europe, although the pace of adoption varies considerably between countries.
Asaf Curelaru, Operations Director for UK & Ireland at Exotec, said: "Europeā€™s shift towards warehouse automation is being driven by a different set of pressures to other regions."
He added: "For many operators, the priority is not only speed or scale, but improving efficiency and unit economics while dealing with persistent labour shortages and rising operating costs."
Italy has taken a more targeted approach to encouraging automation through its Industry 4.0 and Transizione 4.0 programmes.
Businesses investing in qualifying automated equipment, advanced machinery and robotics can claim tax credits against investment costs, with credits of up to 20% available on qualifying investments of up to ā‚¬2.5 million.
Exotec argues that measures such as these can make automation projects more financially attractive for businesses trying to modernise their operations while dealing with staffing and productivity pressures.
Labour availability has become a significant challenge for warehouse operators, with businesses seeking ways to build more resilient operations while reducing their reliance on hard-to-fill roles.
Curelaru said: "Labour availability is becoming one of the defining issues for warehouse operators in Europe."
He added: "In the UK, turnover remains high, and many businesses are finding it difficult to build stable, scalable warehouse teams. This makes automation increasingly relevant, not as a standalone answer, but as part of a broader strategy to improve resilience, productivity and consistency."
The cost of running warehouse operations is also contributing to interest in automation.
Businesses are under pressure to increase throughput while making better use of existing facilities, particularly where expanding warehouse space may be expensive or impractical.
"Rising warehouse costs and the need for greater storage density are also key reasons businesses are investing in automation," Curelaru said.
"Automated systems can help operators improve throughput and make better use of existing warehouse space, but the business case is often held back by the level of upfront investment required."
While support for business investment is available in the UK through broader government measures, Exotec believes more focused incentives for warehouse and logistics automation could help companies overcome those initial costs.
The firm argues that without more targeted assistance, British warehouse operators could find themselves at a disadvantage to competitors in countries where governments provide specific incentives for automation investment.
Curelaru concluded: "The UKā€™s limited targeted automation incentives risks leaving businesses at a competitive disadvantage. While other countries encourage automation, UK businesses are having to fund these investments themselves, making automation projects difficult to justify despite mounting labour pressures.
"The good news is that Italy has already shown what is possible ā€” and the UK has every opportunity to follow suit."