**Logistics sector hailed as ‘engine room’ of UK economy amid global disruption**
The UK’s logistics sector has been described as a stabilising force for the economy as businesses continue to face supply chain disruption, rising costs and geopolitical uncertainty.
Logistics UK said the sector had responded with speed and resilience to recent pressures, including trade tariffs and the impact of conflict in the Middle East.
The business group said logistics had helped keep goods moving reliably for businesses and consumers, supporting growth during a period of economic turbulence.
Its annual Logistics Report 2026, published on 3 June, estimates that the sector now contributes £175 billion a year to the UK economy.
That represents a 3% year-on-year increase, with logistics also employing 8% of the UK’s workforce.
Speaking at the launch of the report during Logistics UK’s Annual Conference, chief executive Ben Fletcher said recent months had underlined the importance of the industry.
“The last few months have shown how critical UK logistics is to our way of life,” he said.
He added that while businesses across the country had faced supply chain disruption, higher costs and uncertainty, logistics operators had “stepped up to reroute goods, absorb shocks and maintain the steady flow of essential supplies”.
Mr Fletcher said the sector’s rising economic contribution showed its central role in national growth.
“With the sector increasing its annual GVA contribution to £175 billion, it is clear that logistics is the engine room of the UK economy,” he said.
“Nothing moves without logistics,” he added, saying the industry worked “round the clock” to find solutions to supply chain disruption.
The report combines official statistics with industry insight and highlights the pace of technological change across the sector.
Logistics businesses are prioritising investment in innovation to improve efficiency, control costs and support the shift towards lower-emission operations.
According to the report, 64.3% of respondents said they intended to invest in vehicle technologies, reflecting the move towards cleaner fleets.
Investment in data and digital systems also remains a priority.
More than half of respondents said they expected to invest in fleet management data systems, while 50.7% planned investment in transport planning and route optimisation technologies.
A further 52% said they expected to invest in data systems for order processing, inventory management and wider supply chain control.
The report also points to continued investment in alternative fuels as the sector works to reduce emissions.
Battery electric vehicles are leading this transition, with 66.4% of respondents reporting investment in electrification.
Hydrotreated vegetable oil, known as HVO, is also playing a significant role, with 41.8% of respondents adopting the technology.
The report suggests HVO’s appeal is linked to its ability to cut carbon emissions significantly while often being suitable for use in existing diesel engines without major vehicle modifications.
Mr Fletcher said the industry was making “significant investment in decarbonisation”.
He said major charging hubs had opened this year in strategic locations in the East Midlands and Tilbury.
Electric HGVs had also travelled into continental Europe through the Channel Tunnel for the first time, which he said showed that “range anxiety will soon be a thing of the past for eHGVs”.
However, Logistics UK said operators still needed the right support to make the transition workable.
Mr Fletcher said operational requirements would remain the main consideration for firms implementing decarbonisation strategies.
He said the organisation had consistently called for “a fair decarbonisation transition”, backed by action on grid connection delays, regulatory burdens and the high cost of low-carbon fuels.
He warned that while the sector’s efficiency often meant its work went unnoticed, its ability to continue powering the economy should not be taken for granted.
“The efficiency of logistics operators can often mean their work goes unseen,” he said.
But with the right policy framework, continued public and private investment and closer collaboration between government and industry, he said logistics could become “a powerful catalyst for growth and resilience across the whole economy”.
Logistics UK represents businesses across road, rail, water and air freight, as well as companies that rely on the movement of goods, including retailers and manufacturers.
The organisation said the sector had never been more important to UK plc as decarbonisation, new technology and wider disruption continue to reshape the movement of goods across borders and supply chains.