Warehousing and transport is the fastest growing industry in the UK over the past two years following Brexit and the online shopping boom during the pandemic. The number of businesses in the sector grew by 21% between 2019 and 2021, while growth across all industries was just 1%, according to figures released by the Office for National Statistics (ONS).
In comparison, the industries with the second highest growth, construction and accommodation and food services, only saw their number of businesses increase by 5% each. The warehousing and transportation industry was expanding even before the pandemic, with the number of companies in the sector growing from 82,270 in 2011 to 154,950 in 2021.
After the end of the Brexit transition period, one in 20 companies in the transport and storage sector said they would make changes to their operation and production, according to the UK Business Insights and Conditions Survey conducted by ONS in December 2020. Among these companies adapting their supply chain, 80% of them planned to use more UK suppliers, leading to a growing demand for warehousing space and logistics services in the UK -United. But a boom in online shopping during the pandemic accelerated the trend.
In February 2020, online shopping accounted for 19% of total retail sales, it has increased during the pandemic, peaking in January 2021 at 38%, and is still at 28% two years later. To facilitate the boom in online shopping, the number of postal and courier services has increased by 63% over the past two years, from 26,100 in 2019 to 42,500 in 2021. These companies have been a key driver of the growth in the transportation and warehousing industry.
The increase in e-commerce has also led to a surge in plans to build new warehouses. The value of new orders for warehouse construction stood at £5.6billion in 2021, the highest value since records began in 1985. It was also more than double the value of new projects warehouse just two years ago, which was £2.7 billion.
One in five pounds spent on new warehouses was recorded in the East Midlands, according to ONS new orders data provider Barbour ABI. This was followed by Yorkshire and the Humber, which accounted for 16% of warehouse spend, with East of England and the West Midlands accounting for 13%. These areas in the center of the country with a high concentration of distribution facilities have been called the “logistics golden triangle”.
Stretching from Northamptonshire to East Midlands Airport and parts of Staffordshire to the west, the triangle area is estimated to be within four hours drive of 90% of the UK population. It benefits from the main motorways nearby, including the M1 and M6, as well as cheaper rent for warehouses compared to other areas.
In Rugby in Warwickshire and South Holland in Lincolnshire, more than 17% of businesses belong to the transport and storage industry, the highest in the UK. The UK Warehousing Association welcomed the ONS report and the growth of the industry.
“The growth of transportation and storage is the fastest growing of any industry group, and our sector – along with e-commerce – is expected to continue to grow,” said Clare Bottle, the association’s chief executive. However, she says there are concerns about the ONS definition of the transport and storage industry, including the inclusion of passenger transport operations, which are not part of the sector, and the omission of transport services. retail and wholesale, which are the main drivers of the increase in warehousing. request.