The recent UK Budget and accompanying announcements brought a whole new range of challenges to business. Weak economic growth, rising costs, new duties and tighter regulations are just some of the factors that are going to make the next couple of years trickier for almost every business.
Particular challenges include
- Fuel duty hikes from 2026
- Uplifted minimum wage levels and higher employer National Insurance Contributions
- Increased Business rates on sites valued above £500,000.
- The planned removal of the “de minimis” rule for low-value imports.
Whilst the temptation maybe to cut investment, freeze recruitment and bear down on costs, we know that only be addressing these additional challenges in a positive way will organisations succeed in the longer terms. Within the logistics arena there are still opportunities to reduce unit costs whilst improving your organisations competitive position.
- The cost of automation and mechanisation to reduce labour costs is reducing in real terms and becoming within the scope of an increasing number of organisations.
- Data management and AI is increasingly being used to assist in the management of supply chains to improve product availability whilst reducing stockholding and handling costs.
- The increase in business rates for large warehouse could provide new opportunities for smaller local sites.
- The removal of the “de minimis” rule for low-value imports is likely to push sub-£135 parcels towards UK fulfilment centres, therefore boosting demand for domestic warehousing and inventory handling
- The retention of generous tax-relief regimes such as “full expensing” and a new first-year allowance for key assets. This opens a window for firms to invest now in fleet upgrades, automation, electrification, and warehouse modernisation.
To assist in determining how to respond positively to the opportunities and challenges Davies & Robson can provide the following support:-
Model Current And Future Logistics Solutions
Modelling the effects of fuel duty increases, higher business rates and staffing cost inflation on the current operation and evaluating alternative solutions including restructuring the supply chain network and the increased use of mechanisation and automation
Reassess Your Warehousing & Fulfilment Footprint
We’ll help you audit your warehouse portfolio, evaluate the potential benefits of shifting low value imports customer deliveries to UK sites, and optimise your footprint ahead of demand surges from changes to customs rules.
Strategic Timing of Investments
Whilst the main rate for written down allowances has reduced from 18% to 14% the Government has introduced a new 40 percent First Year Allowance for most expenditures on assets for leasing and expenditure by unincorporated businesses. This could be particularly beneficial of investments in electric or HVO trucks, warehouse automation, robotics and energy-efficient infrastructure, where tax incentives and long-term ROI align.
Prepare for Regulatory & Supply-Chain Shifts
From customs compliance to fleet decarbonisation and labour cost pressures, our team will help build a roadmap that keeps you ahead of change.
Davies & Robson has significant experience in re-modelling and optimising supply chain operations to incorporate changing commercial conditions.