Logistics: Delivering a solution to the UK’s productivity puzzle
Oxford Economics have found that restoring the UK’s position as a global leader in logistics could boost UK GDP by £3.9 billion by 2030.
Logistics forms the backbone of modern commerce and trade, spanning road, rail, water and air – ever innovating to become increasingly efficient, using technology and data to integrate processes, systems and transport modes, and to decarbonise fleets and warehouses. Logistics is a sector creating opportunities across the UK and linking the UK to the global trade network.
However, the UK’s position in the World Bank’s Logistics Performance Index (LPI) has deteriorated significantly in the last decade, falling from fourth in 2014 to joint-19th in 2023.
We estimate that if the UK returned to the top-10 of the LPI rankings by 2025, it would boost productivity, boosting GDP in 2030 by £3.9 billion (0.13%) in today’s prices, consistent with a increase in average annual household disposable income of £80 in 2030.
If the UK rises to the top of global rankings by 2025, productivity could be higher by 0.27% by 2030, adding £7.9 billion to GDP in today’s prices, which would translate into an increase in average annual household disposable income of £160. The amount of taxes generated through the increased economic activity in this scenario could finance the annual salaries of more than 40,000 nurses or secondary school teachers in the UK.
The experts behind the research
Our Economic Consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:
Henry Worthington
Director, Economic Consulting
Laura Spahiu
Econometrician, Economic Impact
Anubhav Mohanty
Associate Director, Economic Consulting
Harry Pickford
Economist, Economic Impact
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