Manufacturing & Supply Chain

The government has recently published the Modern Industry Strategy (with supporting Sector Plans currently covering Advanced Manufacturing, Clean Energy Industries and Digital and Technologies); and CP1344 UK Infrastructure: A 10 Year Strategy. The Modern Industrial Strategy is part of the government’s wider ‘Plan for Change’. It sets the economic and strategic vision. CP1344 lays physical and digital groundwork to support/help realise that vision, with specific focus on transport and logistics, energy networks, housing and planning, digital infrastructure, and environmental resilience. 

Plans to digitalise trade

The government has also published its Trade Strategy and its Global trade outlook: June 2025 report. The Trade Strategy includes commitments to digitalisation of trade documents to reduce border friction and ease administrative burdens, and to establishment of new Supply Chains Centre and Economic Security Advisory Service to monitor and address supply chain risk. The Strategy also confirms the government’s intention to deliver the Single Trade Window. 

The UK Carbon Border Adjustment Mechanism (CBAM) is set to come into force from 1 January 2027. CBAM is a tax charged on the emissions embodied in certain specified goods imported into the UK. It applies to a defined list of goods and pre-cursor goods from five sectors, grouped into the following main categories: 

• Aluminium Products (includes unwrought aluminium, powders, bars, wires, sheets, foils, tubes, pipes, structural components, containers, and other articles made of aluminium) 

• Cement (various types of cement and cement clinkers, including Portland, aluminous, and hydraulic cements) 

• Fertilisers (nitric acid, ammonia, potassium nitrates, and a range of mineral or chemical fertilisers) 

• Hydrogen 

• Iron and Steel Products (iron ores and a wide range of iron and steel products, such as bars, sheets, pipes, tubes, structural items, containers, fasteners, and other articles, with certain ferro-alloys excluded). 

The government has also released a CBAM policy update and a factsheet, to provide businesses affected by CBAM with an overview of its scope and design. 

In related news, the European Parliament has endorsed the European Commission’s proposal to simplify the EU CBAM. Amongst others, a key change will be the introduction of a new de minimis mass threshold of 50 tonnes. It will exempt 90% of importers (primarily SMEs and individuals) from CBAM rules. 

£27.8 billion funding for industry

The government has published its June 2025 spending review. Up to £27.8 billion capital is to be invested through the National Wealth Fund, which prioritises investment into the clean energy, digital and technologies, advanced manufacturing, and transport sectors. 

Reducing bureaucracy, costs and border friction for UK logistics operators

On 19 May 2025, the UK announced that agreement had been reached on a new UK-EU deal. Details are set out in a joint statement from the parties, as well as a new Security and Defence Partnership and a Common Understanding on a renewed agenda for EU/UK cooperation. The Cabinet Office has also published a UK-EU summit explainer for impacted businesses. 

The new UK/EU agreement includes changes to the required checks on plant and animal products moving between GB and EU, and between GB and Northern Ireland. Logistics UK has said the changes could reduce bureaucracy, costs and border friction for UK traders and logistics operators, especially in relation to current requirement for Sanitary and PhytoSanitary (SPS) checks. During the implementation of import controls for the Border Target Operating Model, there was initially a temporary easement, until 1 July 2025, on medium risk fruit and vegetables imported into the UK from EU, Switzerland and Liechtenstein. Under the planned SPS agreement, these checks wouldn’t have to take place, so the easement has been temporarily extended until 31 January 2027. 

Technology for building resilient supply chains

Against uncertainty surrounding tariffs and geopolitical instability, technology can be a key option for building resilient supply chains. According to recent survey from Maersk and Reuters, Enterprise Resource Planning and forecasting technologies top the list of most useful and widely deployed technologies for European supply chains in 2025. The survey notes a high return on investment in deployment of these technologies. 

There’s a more mixed picture when it comes to AI.  A NTT global survey notes that 95% per cent of manufacturing execs say generative AI is already boosting performance, and 92% report that legacy technology is limiting expansion. However the Maersk and Reuters survey (referred to above) notes a decline in respondents believing AI helps resilience and cautions against investment in/adoption of AI without the right expertise and use cases. 

The computers really are coming: Reuters has reported that China is building and training humanoid robots at such a scale that their cost could be halved by 2030, paving the way for economic viability and wide-scale commercial use.  

Protect your business against cyber threats

The International Association of Ports and Harbours launched a new set of  cyber resilience guidelines to protect your business against threats to emerging technologies across the supply chain. 

Intensifying trade controls, global supply chain disruptions, and escalating national security priorities are impacting demand, sourcing and pricing of critical minerals and rare earth elements. The Department for Business and Trade has published an assessment of the UK’s capability in midstream processing, and the recycling and recovery of critical minerals. Commentators are forecasting that the situation will soon be exacerbated by China’s dominance of metal smelting capacity. An updated UK critical minerals strategy was due to be published in Spring 2025 and is currently still awaited. 

The Competition and Markets Authority has published informal guidance, issued to the Builders Merchants Federation, in respect of a proposed supply chain assurance initiative. Some of the key takeaways from the guidance may help other businesses seeking to implement their own sustainability/supply chain assurance initiatives. 

We’ve previously reported that the Court of Appeal had ruled that a case brought by migrant workers against Dyson, including allegations of forced labour and dangerous conditions at two Malaysian factories, could be heard in the English courts. Dyson appealed that decision, but the Supreme Court has now decided Dyson can’t block abuse claims from continuing in England. The case remains one to watch. 

The Financial Times reported, on 4 July 2025, that Hitachi Energy’s Head is calling for rules to alert utilities to wild fluctuations in data centre demand which could destabilise global electricity supply. Huge surges in power demand, occurring while data centres train AI models, are challenging electricity supply, which could impact manufacturers. The International Energy Agency has predicted that data centre electricity consumption will double to 945 terawatt-hours by 2030 – more than the power currently used by an entire country such as Japan! The FT reports that Ireland and the Netherlands have already restricted the development of new data centres due to concerns about their impact on the electricity network. Hitachi Energy is at the centre of a global shortage of power transformers that are essential for adjusting voltage. It plans to invest $6bn to increase production capacity and hire an additional 15,000 workers by 2027 to meet orders. 

Logistics

Logistics UK has published a report exploring current and future energy demand from road freight. The report notes that 30% of logistics industry respondents are spending more on decarbonisation than last year, but that there’s significant nervousness around cost, the different technologies available, and infrastructure constraints. The report shares insights on where energy infrastructure will be needed and when, and on current industry thinking on alternative fuels and technologies.

Logistics UK has also published its waterborne freight logistics network report, which considers the environmental, traffic congestion and regional connectivity benefits of expanding and innovating use of the UK’s coastal, river and canal network. The report suggests that there’s significant potential growth using existing and improved infrastructure, noting issues such as access to waterways and planning implications. 

Funding for electric vehicles and active travel

Key items from the June 2025 spending review affecting the transport sector (non-exhaustively) include: 

• Up to £27.8 billion capital to be invested through the National Wealth Fund, which prioritises investment into the clean energy, digital and technologies, advanced manufacturing, and transport sectors 

• £2.6 billion capital investment to decarbonise transport from 2026-27 to 2029-30. This includes £1.4 billion to support the continued uptake of electric vehicles, including vans and HGVs, and £400 million to support the rollout of charging infrastructure 

• Extending the Advanced Fuels Fund through the spending review period, allocating £616 million for Active Travel England from 2026-27 to 2029-30 to support local authorities to build and maintain walking and cycling infrastructure, and funding research into transport decarbonisation to unlock innovation and support technologies of the future 

• £24 billion to maintain and improve motorways and local roads across the country 

• Confirmation of a further £3.5 billion for the Transpennine Route Upgrade. 

CILT(UK) has revealed its Top 30 UK Logistics Service Providers for 2025. The list highlights organisations that are innovative, progressive, and exemplify excellence. It’s based on an assessment of publicly available data including company financials, performance, professional accreditation, gender pay gap (for companies with 250+ employees), modern slavery statements, and environmental and social governance practices. 

Savills World Research has published a new report on how industrial and logistics occupiers adapting their real estate strategies to stay resilient, agile, and future-ready in an era shaped by shifting tariffs, geopolitical tensions, and climate risks.

Recent research shows the cold chain sector is the fastest-growing segment in the UK’s warehousing and storage market. The sector generated approximately £56.49 billion in revenue in 2024 and is projected to reach an estimated £89.79 billion by 2030. This article by insurance broker and risk management consultancy Gallagher, looks at liability risks in cold storage warehousing. 

New portal launched for major infrastructure projects

The UK’s Infrastructure Pipeline Portal, developed by National Infrastructure and Service Transformation Authority (NISTA), is due for launch imminently. It will be regularly updated and contain comprehensive information on major infrastructure projects. In related news, NISTA is also planning to launch its new spatial digital tool (alongside the pipeline portal), to strengthen the local evidence base for infrastructure investment decisions. 

The Competition and Markets Authority (CMA) has launched a market study into the civil engineering sector. The CMA has said it will focus on how to improve the design, planning, and delivery of key road and railway infrastructure in the UK in support of the government’s growth mission and 10 year infrastructure strategy. It intends to conclude the review within 10 months. Our market-leading Competition team, working cross-sector with Real Estate, Construction and Infrastructure & Energy colleagues, has extensive experience of advising businesses on CMA market studies and investigations. 

We’ve previously reported that the CMA was investigating the acquisition by GXO Logistics, Inc. of Wincanton Plc due to competition concerns. The CMA has now cleared the merger, subject to conditions. 

Air freight has demonstrated resilience during Covid and geopolitical issues affecting maritime supply routes. East Midlands Airport has unveiled plans that could create more than 20,000 jobs by making land around its runway available for development. The aim is to establish the UK’s most important air cargo hub and help meet a predicted 54% growth in demand for air cargo services over the next twenty years. 

Air Cargo has reported that DHL’s refugee workforce model represents not only a significant human development milestone, but also a forward-looking labour strategy with direct relevance for the air cargo and logistics sectors. 

The International Road Transport Union’s 2024 report (published May 2025) reveals a persistent global shortage of truck drivers, with a widening age gap. Drivers under 25 comprise only 6.5% of the workforce; those over 55 have increased to 31.6%; and 3.4 million drivers are expected to retire by 2029 in the countries studied, posing a substantial risk to supply chains. 

Major restrictions to the sponsorship of migrant workers

The government has announced major restrictions to the sponsorship of migrant workers (notably on the Skilled Worker route), taking effect on 22 July 2025. Key changes (non-exhaustively) include: 

• Other than in limited circumstances, only roles which are classified as being skilled to degree level or above (RQF Level 6) will be capable of being sponsored from this date; and 

• General minimum salary thresholds will increase, as well as ‘going rate’ salaries applicable to individual occupation codes, for all applications (meaning individuals already sponsored will need to meet the increased salary thresholds for extension applications). 

See our briefing for further information and recommended urgent advice. 

Measures to reduce the carbon intensity of ships

The UN International Maritime Organisation has approved measures to cut ships’ carbon intensity, with an in force date of 1 March 2027. There will be widespread implications of carbon pricing for sea freight. A wide range of businesses may need to renegotiate existing contracts and ensure new contracts include provisions to comply with a globally enforceable regime. There will be new mandatory corporate reporting requirements, and businesses should review their logistics/transport arrangements, incentivise fuel efficiency and audit fuel-related surcharges. 

MHCLG has published the Construction Products Reform Green Paper on wide-ranging plans for future regulation of construction products. Proposals include bringing all construction products within the general product safety regime; enhanced regulatory, surveillance and enforcement powers; development of a new single Construction Products Regulator; and civil and criminal penalties for manufacturers that engage in misleading practices or neglect their responsibilities regarding product safety. It’s the first step in what the government says will be a proactive process of engagement and consultation across the system in the medium to longer term.  

Investment in sustainable aviation fuel

The UK government has announced new sustainable aviation fuel (SAF) legislation introduced to Parliament, as well as funding, to help boost homegrown SAF and speed its route to market. 

The government has reaffirmed its commitment to the phase out of the sale of new petrol and diesel cars from 2030, with the exception of hybrid vehicles. From 2035, all new car and van sales must be for zero emission vehicles. 

From 29 May 2025, drivers and businesses will no longer need to submit a planning application to install public or private electric vehicle charging sockets. 

How AI could improve transport safety

The Department for Transport and the Centre for Connected and Autonomous Vehicles have published a series of documents outlining their proposed approach to AI and automated vehicles in transport: the Transport AI Action Plan; a consultation on the Statement of Safety Principles for self-driving vehicles; and draft regulations to restrict marketing terms such as “autonomous” or “self-driving” to vehicles that meet specific legal standards. The AI Action Plan sets out how AI could improve transport safety, reduce emissions, and increase network efficiency. 

We mentioned humanoid robots above. In related news, Amazon is already using humanoids with a sense of touch in its fulfilment centres and MIT, UCL and Cambridge University are reporting significant developments in humanoid robots both with and without artificial skin. 

Electrifying your transport assets

The Energy Networks Association has launched a tool providing guidance to transport operators on how to obtain power connections to locations to charge their electric fleets. The guidance explains the complex process which differs across jurisdictions. It aims to encourage operators to engage in electric fleet transition. 

The Administrative Court has dismissed claims for judicial review brought by two interest groups against the Government’s Jet Zero Strategy. 

A new railway connecting Liverpool and Manchester has been described as the “missing link” in a plan to boost jobs, deliver new homes and grow international trade. 

The government has announced its proposal to introduce mandatory biodiversity net gain for nationally significant infrastructure projects from May 2026 (6 months later than originally planned). The consultation is open until 24 July 2025.