Logistics sits at the heart of all economic activity across these islands and plays a vital role in growth and economic development. In Northern Ireland alone, there are currently more than 65,000 people employed in logistics roles, in over 6,000 logistics businesses, making, selling and moving the goods that the economy relies on every day. Without logistics, there is no trade and the sector enabled Northern Ireland to export goods to the value of £19.56 billion in 2022.
The importance of logistics to the economy is clear, but with appropriate policy support it can contribute even more and help drive growth across the economy. When we surveyed businesses for our annual Logistics Report 2025, our members were united on the clear policy action they wanted from government this autumn – a cut in fuel duty. Fuel is a significant expense for logistics businesses, representing one third of the industry’s costs and 60% identified a reduction in fuel duty as the policy they would like the government to deliver to help drive investment and growth.
The temporary five pence per litre cut is scheduled to end in March 2026 and there is a temptation for industry to call for an extension. However, the most effective way this government could support our industry and help it to drive economic growth in the coming year is to not just avoid a rise in fuel duty, but to actually cut it. We recommend Chancellor Rachel Reeves does exactly this in her Autumn Statement and cuts duty to kickstart economic activity and growth across all sectors. With business uncertainty still high, a bold move is needed to support our members and ensure they can deliver confidently for customers and consumers.
According to Logistics UK, a 10p per litre cut in fuel duty will reduce fuel costs across the UK by almost £5 billion* a year for both industry and consumers, which will allow businesses to invest and help drive growth. It would also help grow the economy through increases in consumer spending, putting money in the pockets of people across these islands. In Northern Ireland, where road transport is essential for cross-border trade and rural connectivity, a fuel duty cut would have an especially significant impact, helping local businesses remain competitive and easing pressure on consumers.
Logistics businesses ensure our shops, businesses, hospitals and homes are supplied with the goods they need. Increasing the duty payable on fuel, with no viable business alternative currently available, would not just hit our industry at a time when many businesses are struggling as a result of increased costs, but also mean an inflationary knock-on effect to consumers, who would receive a double whammy of increased prices in the shops as well as at the pumps. For Northern Ireland, which faces unique challenges due to its geographical separation from Great Britain and its reliance on both UK and EU trading rules, additional fuel costs could further strain already stretched supply chains and impact cross-border trade with the Republic of Ireland.
We are operating in sluggish times – growth is now predicted to be 1.1% during 2025 and our Logistics Report shows that overall business confidence has declined compared to previous years. In this environment, we need a brave and confident government to take the steps needed to jump start the economy. A significant cut to fuel duty will free up levels of cash which can then be used to invest in the key areas that help ease trade – a move that would give Northern Ireland and the rest of the UK the boost it needs to kickstart the economy.
Logistics UK is one of the UK’s biggest business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With decarbonisation, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, water and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods. For more information about the organisation and its work, please visit logistics.org.uk
*Logistics UK’s analysis of fuel usage and fuel duty is calculated with the assumption that the amount of fuel used and number of vehicles remains constant and shows a 10p reduction in fuel duty will cut costs for businesses and consumers by approximately £4.7 billion a year.
Details and summary of The Logistics Report 2025 report can be found here: www.logistics.org.uk/research-hub/reports/logistics-report
