Transportation and storage sector surges as online retail grows
The growth of online retail has driven a significant increase in the number of companies in the transportation and storage sector since 2013, Paragon Bank analysis has revealed.
Analysis of Companies House data shows there has been a 155% increase in businesses registered in that sector since 2013, the second highest growth sector of the period. In total, 163,783 transportation and storage companies were registered in the 2019/20 financial year, according to the statistics.
The growth of this sector aligns with a significant increase in online retail over the same period. Government figures show that online sales represented 10.5% of total retail sales in January 2013, increasing to 36.3% by January 2021.
Companies House top ten growth sectors 2013-2020
The number of companies registered in the sector is likely to grow further in the current financial year on the back of surging online retail sales following the first lockdown in March last year. This continues to create huge demand for more delivery firms and SMMT figures showed a 25% increase in the number of 2.5 tonne to 3.5 tonne vans – popular with delivery firms – registered in the year to January 2021.
Figures released by Auto Trader last year, showed that the average prices of used commercial vehicles surged by 10% following the onset of Covid-19. When showrooms reopened after the initial lockdown, demand for commercial vehicles soared, with the number of unique users visiting Auto Trader Vans marketplace increasing by 79% on the pre-pandemic levels.
Dale Trenam, head of transport finance at Paragon Bank, said: “The way we shop is driving significant changes in the transportation and storage sector, fuelling demand for distribution warehouses and increasing the number of self-employed courier businesses. It is estimated that every £1bn of additional online retail spend requires approximately 1.36 million sq ft of warehouse space. With UK online sales forecast to rise by up to £67bn over the next five years, we could see e-commerce drive additional requirements of 92 million sq ft and that creates opportunities for more deliver businesses also.
“Keeping the UK moving is more important in the current climate than ever and we have seen the transport sector step up hugely, from increased and socially distanced school transport, to supporting the Covid-19 vaccine roll out. During 2021 we can expect to see further changes for the sector through improvements to the UK’s road infrastructure and the movements towards more sustainable vehicles.”