Logistics Confidence Index 2023

Logistics Confidence Index 2023

Logistics confidence falls to second lowest level on record, as operators take a ‘reality check’ 

  • Confidence in the logistics sector falls to second lowest level on record – just above COVID-19 levels 
  • Three-quarters of operators feel business conditions are more difficult now than a year ago
  • Levels of demand is the number one concern for 71% of logistics businesses 
  • However, around four in 10 predict a rise in profits over the next 12 months.
  • Appetite for mergers and acquisitions (M&A) remains strong with 40% of logistics leaders saying they are likely to make acquisitions over the next 12 months.


Confidence in the logistics sector has fallen to its second lowest level on record, only slightly above that seen during the first COVID-19 lockdown in 2020.  This is a further realignment of the market after the fall recorded in 2022, and suggests a dose of realism after the economic turmoil of the last year, as supply chain capacity has normalised. 

The latest figure is in contrast to the marked optimism seen in 2021, as the sector bounced back from the effects of the pandemic – a time of increased levels of home delivery and higher rates for global logistics services. 

Three quarters of operators feel business conditions are more difficult now than a year ago, with levels of demand the number one concern.  There is also a growing concern around customers retendering contracts and putting pressure on pricing – close to two thirds see it as a major issue in the year ahead.

Interestingly, staff shortages and increased labour costs – a perennial problem for the sector - are becoming less of a concern for businesses. Challenges in recruiting warehousing staff and LCV drivers have also eased as volumes fall. 

Appetite for mergers and acquisitions remains strong as many operators look to boost volumes through new service offerings or breaking into new sectors. 40% of logistics leaders say they are likely to make acquisitions over the next 12 months – down on our previous two reports but still the third highest ever result since the Logistics Confidence Index began in 2012.


Read our report for more on:

  • Where respondents see opportunities for growth
  • Why customers are choosing to switch logistics providers
  • Interest in investment in ESG and the growing commercial importance of being able to demonstrate ESG credentials
  • Priorities for investment in alternative fuel types
  • Drivers for investment in technology, and industry insights from Diamond Logistics, Kuehne +Nagel and Miniclipper Logistics.


Jason Whitworth, Partner, M&A Advisory and Logistics & Supply Chain Management said: “Given the economic environment and market dynamics, it’s not surprising that the industry is cautious about the current trading environment, with real concern over volume of activity across certain sub-markets. As always, the logistics industry is feeling the effects of a tightening economic climate more than most, as inflation and interest rate rises continue to have an impact on consumer behaviour.

“Despite the lower overall confidence, there are still plenty of opportunities for operators, including greater collaboration with customers and other providers in the sector.  Investment in technology and ESG measures is a positive step to pursuing both cost savings and gaining competitive advantage. In addition, due to a need by many operators to boost volumes through new service offerings or breaking into new sectors, appetite for M&A activity remains strong.” 
 

Read the full report

 

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Watch our webinar for the launch of the  latest edition of the BDO-Barclays UK Logistics Confidence Index 2023, with speakers and Q&A from BDO, Barclays and industry guests Diamond Logistics and Savills UK

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