In 2024, the British Property Federation's manifesto Building the UK's Critical Infrastructure called on the Government to recognise logistics as critical national infrastructure. Since then, the I&L sector has continued to play a vital role in supporting the UK economy and everyday life. However, it is facing a range of significant challenges, and this article highlights the key supply chain issues currently affecting the I&L sector and how some of our clients are trying to mitigate them.
Geopolitics
Continuing substantial and ongoing geopolitical tensions and regional conflicts continue to create significant uncertainty and put real pressure on supply chains. Trade routes are no longer stable (or, perhaps, exist at all) and finding alternative routes can be difficult and costly, particularly when fuel and energy costs are rising. We are seeing clients regularly and proactively reviewing their supply chains to see if materials can be supplied at a regional level to ensure continuity of supply, and also seeking to adopt dual-resourcing to future-proof against future issues.
Increasing costs
Costs have continued to rise this year, with the war in Iran driving increases to fuel and raw materials prices. In addition, constant changes to tariffs are increasing costs. Clients are adapting their supply chains to see if they can nearshore any elements of it, and they are looking at alternative trade routes that are not as exposed to tariff changes. We are also seeing clients phasing projects and adapting schemes in order to flex with changing market requirements in order to mitigate increasing costs.
Labour
Skills shortages remain a major challenge across the supply chain. With high job vacancy levels in some areas, an ageing workforce and increasing competition for talent, labour constraints continue to hamper growth in the sector. Some clients are increasing their investment in automation and robotics to address these issues; however, such solutions require significant capital investment and time to implement.
Digital
High-profile cyber-attacks such as the Jaguar Land Rover attack in 2025 have reinforced cyber risk as a board-level issue. Disruption quickly spreads throughout all levels of the supply chain and can be particularly damaging for smaller businesses. In response, clients are reviewing their supply chains to understand who has access to their data, increasing requirements for certifications such as Cyber Essentials, and strengthening contractual security obligations. This includes minimum security standards, audit rights and business continuity requirements to help minimise disruption and accelerate recovery following an incident.
ESG
As well as dealing with the above issues, businesses are also trying to maintain compliance with ESG commitments. Stakeholders at all levels expect an ethical supply chain, but at times providing these may increase the complexity of supply chains and ultimately costs. The I&L sector typically has complex global supply chains and clients are having to devote more constrained resources to ensure compliance. We are helping clients to review supply chains and update contracts to include mechanisms to audit compliance throughout the supply chain.
The I&L sector continues to prove its resilience, although equally it is recognised that it taking more effort, time and costs to manage and mitigate the ongoing issues it is currently facing. Our teams work closely with clients in the sector to successfully address these challenges and to manage risks throughout their supply chains. If you would like to discuss any of the issues raised in the article and how they may affect your business, please get in touch with a member of our I&L team.