Is Logistics Ready for the UK’s Modern Industrial Strategy?
A once‑in‑a‑generation growth moment, if logistics can keep up, can logistics cope?
As well as the 1.5 million new homes which had already been put on the table before the current government came into power, we now have the UK’s Modern Industrial Strategy. There were multiple references to this strategy in the November 2025 budget, with the government planning to invest an additional £120 billion compared with the plans set out at the previous government’s Spring Budget 2024.[1]
For logistics, this is not a side note. It is a warning light and an opportunity light, flashing at the same time.
Not all of that investment is immediate. It’s a 10-year plan, with some elements of spend spread over a number of years. An illustration of the likely scale and distribution of this investment, rather than a precise accounting, can be viewed here. The figures are drawn from AI‑assisted summaries produced by Aricia and the Institute of Directors and are intended for illustrative purposes only.
What the strategy means for logistics capacity
New investment. New supply chains. New pressure on already stretched operations.
Investment is planned in areas such as advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. Every one of the priority sectors named in the strategy depends on highly responsive, resilient, and capacity‑rich logistics networks.
The government described its strategy in a foreword to a previous consultation as “unreservedly pro-business, engaging on complex issues that are barriers to investment, like: skills, recruitment of international talent, data, research and development, technology adoption, access to finance, competition, regulation, energy prices, grid connections, infrastructure and planning”.[2]
Depending on where companies are located, and in what sectors they specialise, the maps on page 30 & 31 of the Technical Annex may well help in identifying whether those businesses that are local to you are likely to directly benefit. Wherever you are, there will, of course, be what is termed ‘trickle-down.[3]
Why this matters now?
Household consumption is down. Economic growth now depends on investment-led sectors.
This investment is really important given the comparatively low level of household consumption and the recent state of the UK economy. For the first two decades of this millennium (2000-2019 inclusive) World Bank figures show the proportion of GDP from household spending in the UK varying between 63.3-65.9%. In a piece compiled by the House of Commons Library in January of this year, the most recent figure available for household spending was 59% in 2024.[4][5]
It’s important for logistics, which is important for the strategy. Pretty much anything that involves construction and investment in physical production contributes directly to the volumes that need storing and transporting. Some other areas may contribute volume in the longer term and more indirectly, for instance investment in creative industries may generate a different mix and greater volume of future tourism, with impact on the hotel and food service sectors.
Freight and logistics does get one page in this 160-page document, which ends by promising: “Working closely with industry, we will deliver a new plan for freight and logistics later this year so that the sector can continue to play its part in growing the economy.”. If you read this page in the government’s document and wonder what IS-8 means, it’s the eight industrial sectors in which the government is investing.
This strategy is where the government is spending money and expects logistics to enable growth.
The growing divide within logistics: warehouses surge forward, fleets fall behind
Warehousing is modernising fast. Fleets, especially HGV operations, face a harder road.
The government’s investment means opportunities, but to benefit from those opportunities, logistics needs to be able to provide capacity, and providing capacity means a combination of assets and people. That’s where some of the other threads in the strategy come in - around automation and robotics, data and AI, clean power and energy infrastructure.
Warehousing companies are already taking advantage of automation, are much more likely to have sophisticated systems, often have substantial connections to the grid already, and are moving to being green with solar panels, rainwater recycling… And it’s easy to see how the use of light vans can be made cleaner by buying BEVs, although the SMMT data for 2025 shows that the majority of new vans are still diesel.[6]
But when it comes to HGVs, it’s less easy to see how the journey to clean energy is going to progress. Many haulage companies are not making a huge amount of profit and so have little money to spend on more expensive vehicles, and the infrastructure required to support them. And what about vehicle charging infrastructure when they are out and about? There is opportunity to modernise, but only if government recognises just what a large job it will be.
Looking ahead: logistics cannot wait for government plans to land
This is a moment to modernise, not to wait.
Logistics stands both as an enabler of growth and a beneficiary of it. Investment in infrastructure, decarbonisation, digitalisation and skills should strengthen the sector. But only the organisations preparing now will be positioned to win new contracts, grow market share and maintain service levels under pressure.
That means:
- Investing in driver recruitment, retention and training.
- Reducing inefficiencies that erode capacity.
- Modernising planning and coordination functions through automation.
- Building flexible fleet strategies that balance diesel reality with BEV readiness.
Your fleet, your people and your planning capabilities will shape whether your organisation is ready for the industrial rebound ahead.
And you somehow need to find a way of doing all of this while preparing for compliance shifts under the ever-expanding remit of the Employment Rights Act, the focus of my next piece, in March.
Data sources include:
https://assets.publishing.service.gov.uk/media/69256e16367485ea116a56de/industrial_strategy_policy_paper.pdf
https://www.gov.uk/government/consultations/invest-2035-the-uks-modern-industrial-strategy/invest-2035-the-uks-modern-industrial-strategy
https://assets.publishing.service.gov.uk/media/6925999c22424e25e6bc3153/industrial_strategy_technical_annex_web_optimised.pdf
https://data.worldbank.org/indicator/NE.CON.PRVT.ZS?locations=GB
https://researchbriefings.files.parliament.uk/documents/SN02787/SN02787.pdf
https://www.smmt.co.uk/vehicle-data/lcv-registrations/
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