The start of 2025 isn’t just about swapping out last year’s wall calendar or setting bold, new resolutions – it’s about gearing up for the challenges and opportunities ahead, especially in the ever-evolving logistics industry.
Quite simply, the supply chain doesn’t exist in isolation. It’s woven tightly into the fabric of economic, political, and environmental landscapes. That means the hurdles we face as an industry mirror the wider changes shaping society as a whole.
At Fagan & Whalley, we’re ready to meet these shifts head-on.
This month, we’re diving into six critical areas driving change in logistics and exploring how we’re positioning ourselves to stay ahead.
Let’s take a look…
1. Logistical challenges: Rising consumer expectations
With 6 in 10 consumers checking their order status at least once a day, and a massive 78% of consumers expecting same-day and next-day delivery – it’s safe to say, the pressure is on.
What was once seen as a value-added extra across the board is now widely considered the bare minimum – which leaves little room for delay or errors in the logistics process. If logistics companies haven’t already invested in last-mile delivery processes, now is the time to do so.
This should include factors such as:
- Vehicle telematics
- AI implementation
- Warehouse automation
- Data analysis
- Fleet investments
Source: Top 1000 report (2023)
2. Logistical challenges: Skills shortages
Secondly, the skills shortage in the UK road transport sector continues to pose a significant challenge for supply chains and the wider logistics industry.
- A shortfall of 50,000 HGV drivers*
- 6,000 fewer delivery drivers in the UK**
- 55% of HGV drivers are aged between 50 and 65***
According to recent estimates by the Road Haulage Association (RHA), the country still faces an overall shortfall of around 50,000 HGV drivers – a persistent issue that remains critical as we move into 2025.
Meanwhile, The Office for National Statistics (ONS) claims there were 6,000 fewer delivery and courier drivers in the UK from April 2022 to March 2023, compared to the year prior.
Causes of the skills shortage within the logistics industry:
There are several factors that contribute to this ongoing challenge, including (but certainly not limited to):
- An ageing workforce
- Reduced access to EU workers post-Brexit
- Poor industry perceptions
- Lasting economic ripple effects of COVID-19
While government-led initiatives aimed at addressing the shortage – such as funding for HGV driver training – have helped alleviate some pressure, statistics show the issue remains far from resolved.
Figures from SNAP show that 28% of surveyed HGV drivers suggested that low pay steered experienced drivers away from the industry and did not offer enough incentives to new drivers.
What does Fagan & Whalley think about the skills shortage?
In response to the alleged driver and skills shortage, Daniel Fagan, Managing Director here at Fagan & Whalley commented,
“While the situation isn’t as severe as it was a few years ago, there remains a significant lack of young people pursuing careers as professional HGV drivers and technicians.”
“Shifting career aspirations, combined with the government’s classification of HGV drivers as unskilled, do little to enhance the appeal of the profession or the industry, which really highlights the vital importance of work by the RHA and Fagan & Whalley’s commitment to a better work-life balance.
To find out more about the UK’s HGV driver shortage read our previous article, here.
3. Logistical challenges: Driver facilities
Additionally, another of the key challenges facing the logistics sector as we move into 2025 is the urgent need for improved driver facilities. Much like last year, this includes the need for more secure parking spaces, enhanced amenities, and stronger security measures.
Sam Fagan commented, “Commercial vehicle drivers are the lifeblood of our economy, ensuring the smooth operation of supply chains. However, the current shortage of adequate roadside facilities fails to fully reflect the critical role they play.”
According to The Road Haulage Association, there is an estimated shortfall of 11,000 HGV parking spaces. Nationally, lorry parking spaces are utilised at an average of 83%, and in some regions, that figure rises to as high as 93%.
This lack of safe and secure parking and welfare facilities forces drivers to spend rest periods on the roadside, in their vehicles, with limited access to essential hygiene facilities. Moreover, this scenario significantly increases the risk of freight crime.
4. Logistical challenges: Sustainability in logistics
Fourth on our list this year is the rising demand for sustainable logistics.
Sustainability is no longer optional in the logistics industry. With 30% of consumers avoiding brands over sustainability concerns and 37% actively choosing brands for their environmental efforts,* the pressure to embrace greener practices is mounting.
The Road Haulage Association describes how HGVs account for 4.3% of overall UK greenhouse emissions, highlighting the need for action from those within the logistics sector. This statistic is a call to action for organisations in our sector to innovate and adopt greener technologies.
Moreover, as governments worldwide implement stricter environmental regulations (such as Clean Air Zones) logistics companies must proactively adapt to avoid potential fines and penalties.
Strategies to boost sustainability in logistics include:
- Adopting alternative fuels
- Using electric manual handling equipment (MHE)
- Investing in solar energy production
- Optimising routing
- Upgrading to fuel-efficient vehicles
- Implementing robust recycling measures
Find out more about how Fagan & Whalley are supporting green logistics here.
5. Logistical challenges – Infrastructure
Furthermore, the state of the UK’s infrastructure remains a pivotal challenge for the logistics industry. Yet again, road congestion throughout the UK leads to longer, more unpredictable journey times, undermining productivity and competitiveness.
This emphasises the need for sustained investment in road infrastructure, a crucial economic and environmental imperative. Surveys by Transport Focus highlight a significant dissatisfaction among freight sector users with England’s major roads. Satisfaction levels have dipped to around 49%, indicating an urgent need for improvement.
The Road Haulage Association (RHA) advocates for a robust governmental commitment to long-term road network investments, emphasising strategic roads, major networks, and vital local routes. This includes the development of a comprehensive list of required road improvements and bridge upgrades, with a focus on expanding green fueling infrastructure.
We believe that addressing these challenges requires collaborative efforts between industry stakeholders and government authorities.
6. Logistical challenges – Rising costs
Finally, like most sectors throughout the UK, rising costs have placed significant financial constraints on the logistics industry.
Over the last year, the cost of operating an HGV has risen by another 10%, according to recent figures from the RHA. For many smaller operators, already operating on razor-thin margins, these increases mean running at a loss has become an alarming reality.
Despite the extension of the fuel duty freeze into 2024 and the 5p cut for fuel duty, which was an important step to support British drivers, there is still a great deal of support needed for hauliers as we move into 2025.
For example, the RHA is currently campaigning for:
- Maintaining of the fuel duty cut and freeze
- Increased Sleeper Cab Allowance to better support drivers on long-haul journeys
- Continued freeze of Vehicle Excise Duty for HGVs to prevent additional costs on already stretched budgets
Looking ahead, the logistics industry will need both short-term and long-term government action to survive rising operational costs while continuing to meet critical demands. With further pressures from initiatives such as the reintroduction of the HGV levy and increasing client demands for greener supply chains, it’s clear that balancing cost efficiency with sustainability will remain a top challenge in 2025.
Some final thoughts…
The road ahead for the logistics industry in 2025 is undoubtedly complex, but it’s not without opportunities. By addressing these challenges head-on – whether it’s rising consumer expectations, skills shortages, or the growing demand for sustainability – we remain committed to delivering progress for our clients and the industry alike.
For more information, please get in touch on 01282 771983 or drop us a message here.
