Innovation in Logistics Services

The logistics industry manages the flows of products, services and information across customers and suppliers, allowing the integration of supply chains. Innovations in logistics can therefore help improve efficiency and effectiveness across many sectors of the economy. Furthermore, innovation can also have a major impact in reducing the environmental burden of this industry, particularly in terms of pollution and greenhouse gas emissions. This overall aim of this report is to understand how the government can encourage and facilitate innovation in the logistics industry. The study focuses mainly on the UK and on the role of third party logistics providers (3PLs). However, in order to reflect the global and interconnected nature of the sector; references are made to other countries and industries. The report starts by providing an overview of the industry, outlining the factors that are driving and obstructing change and innovation. An analysis of the types of innovation that are shaping the industry is then provided alongside examples of some of the most influential innovations. Measuring innovation in a service industry like logistics is fraught with difficulties. However, it is possible to provide an indication of the general tends using traditional methods such as patents and surveys. On the one hand, trends indicated that compared to other industries in the UK, logistics is not amongst the most innovative, arguably because it is a mature industry where change is evolutionary rather than revolutionary. On the on the hand, at an international level, the UK logistics industry appears to be very amongst the top in terms of innovation. Innovation is a primary concern of industry, and companies are constantly looking for ways to innovate in order to gain competitive advantage. The government can also engage with industry and play a role by providing the right environment for companies to innovate