Market insight – The transport & logistics sector

A critical enabler of the wider economy, the UK transport & logistics sector encompasses road haulage, pallet networks, contract logistics, warehousing, parcel/express delivery, and intermodal and specialist freight.

Depending on definition, estimates put the UK logistics market well above £100bn, with studies suggesting total logistics activity contributes c. £185bn to GDP and employs around 2.7m people, or roughly 8-12% of the UK workforce.

The market remains fragmented at operational level, particularly in road freight where 92% of businesses have fewer than 10 employees – a long tail of micro and owner-operator fleets underpins capacity for larger third-party logistics (3PLs), networks and transport groups.

Meanwhile, larger integrated logistics platforms, private equity (PE)-backed groups and international 3PLs are consolidating scale, technology and warehousing footprints to serve e-commerce, retail, fast-moving consumer goods (FMCG), industrial and healthcare customers.

Structural growth in e-commerce, demand for resilient supply chains and ongoing investment in warehousing and urban logistics space, particularly around key hubs in the Midlands ‘Golden Triangle’, are continuing to drive volumes and capital into the sector, despite cyclical pressure on margins.

Factors driving growth

1. Continued rise of e-commerce and omnichannel retail

This is supporting demand for same/next-day delivery, parcel networks, fulfilment centres and value-added warehousing. The UK e-commerce logistics market alone is forecast to grow at around 7% CAGR to 2029.

2. Near-shoring and supply chain resilience post-Brexit and post-Covid

This is prompting manufacturers and retailers to re-route flows via UK and near-European hubs, often outsourcing more to sophisticated 3PLs.

3. Investment in logistics real estate

National take-up of big-box space remains robust, with around 28 million sq ft of logistics space transacted in 2024, supporting growth in contract logistics and warehousing revenues.

4. Decarbonisation and net-zero targets

These are accelerating fleet renewal, alternative fuels and route optimisation, and driving demand for operators who can evidence emissions reductions across the supply chain.

5. Digitalisation

Telematics, transport management systems, warehouse automation and data-driven planning are lifting productivity and making differentiated, tech-enabled operators more attractive to customers and buyers.

Current landscape

The transport & logistics sector spans a number of distinct operating segments, each with its own structural characteristics, competitive dynamics and investment drivers:

• Road freight and palletised distribution: A highly fragmented base of small operators feeding national pallet networks and larger groups; driver availability, fuel costs and wage inflation remain key margin pressures.
• Contract logistics & 3PL: Integrated warehousing, transport and value-added services for retail, FMCG, industrials and healthcare, where scale, technology and multi-site networks are key differentiators (e.g. Wincanton, GXO, DHL, Kammac).
• Parcel/express & last mile: Time-sensitive B2C and B2B deliveries with strong exposure to e-commerce, where network density and technology platforms are crucial. This segment has attracted significant PE and infrastructure interest (e.g. Evri, Royal Mail/IDS).
• Specialist logistics: Temperature-controlled, hazardous, healthcare, high-value and project logistics, where regulatory and technical barriers support pricing power and strategic value.

M&A activity continues to rise

M&A in UK logistics and supply chain management has been consistently active. In 2025, deal volumes and values strengthened, with the sector contributing over £25bn to UK M&A due to a mix of mid-market consolidation and large-cap transactions.

• Almost 1,800 M&A transactions involving UK targets have taken place in the last three years within this sector
• Nearly 3,000 investors and acquirers have registered their interest with KBS Corporate for companies in the transport and logistics sector.

Factors driving appetite for M&A

• Building scale and network density to improve asset utilisation, reduce empty running and strengthen buying power on fuel, vehicles and property.
• Expanding geographic reach – particularly into key UK hubs (Midlands ‘Golden Triangle’, major ports and conurbations) or adding Scottish, Irish and European coverage.
• Securing long-term contracts and sticky customer relationships in resilient sectors such as grocery, FMCG, healthcare, industrials and construction materials.
• Acquiring specialist capability (e.g. contract logistics, high-value fragile equipment, temperature-controlled or value-added warehousing) that would take time and capital expenditure to build organically.
• Accessing technology platforms and digital capability (transportation/warehouse management systems, real-time tracking, automation) to improve service quality and transparency.
• Executing buy-and-build strategies in fragmented sub-sectors such as regional haulage, groupage and pallet networks, where there is a strong pipeline of succession-driven vendors.

Factors driving higher valuations and EBITDA multiples

In the UK transport and logistics space, we have seen deal values that have been calculated on adjusted EBITDA/earnings multiples ranging from 5/6x to double-digit figures, depending on various factors such as:

• Quality and length of customer contracts, visibility of volumes, and exposure to defensive end-markets. Multi-year contracts with blue-chip names typically support stronger multiples.
• Profitability, cash generation and asset intensity – higher-margin, asset-light 3PL/contract logistics models are often valued above pure spot-haulage operations, although strong fleets with modern vehicles and property can still command premiums.
• Scale and network density – platforms with multiple depots and national or pan-European coverage can support buy-and-build strategies, attracting PE and infrastructure capital.
• Technology, compliance and ESG – robust health & safety, regulatory compliance, emissions tracking and demonstrable investment in alternative fuels and carbon reduction increasingly feature in buyer due diligence and can underpin higher pricing.

M&A interest from acquirers and investment routes

Trade & strategic buyers

UK and European logistics groups remain very active: Turners (Soham), Kinaxia Logistics, EFS Global, DFDS, Culina Group, Menzies Distribution and others have all pursued UK bolt-ons in recent years. International 3PLs such as GXO, DSV, DHL and CMA CGM are targeting UK platforms to deepen warehousing and contract logistics exposure.

Private equity & infrastructure funds

PE funds are highly active in logistics globally, attracted by recurring cashflows and consolidation potential. In the UK, this includes mid-market funds backing regional groups, as well as larger funds acquiring parcel and contract logistics platforms (e.g. Stellex acquiring Fox Brothers; Apollo acquiring Evri; EP Group’s takeover of International Distribution Services/Royal Mail).

Cross-border corporate acquirers

Overseas corporates view UK logistics as strategically important due to its role as a gateway to Europe and strong e-commerce penetration. Examples include Swedish group Elanders acquiring Kammac and multiple European/Asian investors acquiring UK warehouses and logistics real estate as part of wider supply-chain strategies.

Family offices, real estate and long-term capital

Logistics-focused Real Estate Investment Trusts and long-income funds have been active in acquiring warehouses and urban logistics schemes, often alongside operating businesses. Family-office style investors and long-term private capital are also increasingly looking at logistics as an infrastructure-adjacent asset class with resilient demand.

Which transport & logistics companies have been sold by KBS Corporate?

A selection of the deals we have advised in this sector:

GIF Transport acquired by Williams Shipping

GIF, a supply chain services provider based near Aberdeen, was sold to Williams, which was founded in 1894 and is among the UK’s leading marine and logistics services providers.

Eric Elliott Transport acquired by Onpoint Group

Nottinghamshire-based Eric Elliott, which began trading in the 1950s and is a highly regarded provider of haulage and waste removal services, was sold to Onpoint Group, a Birmingham-based global logistics specialist.

Direct Sameday acquired by Westland Assets

Nottingham-based Direct Sameday, which provides cost-efficient, reliable haulage and courier services across the UK and into Europe, was sold to Westland Assets with a view to expansion via further investment.

If you are a shareholder of a transport & logistics company, we would be keen to speak with you regarding your potential exit or succession plans. If you are open to exploring this avenue or have any questions, please do not hesitate to call us on 0161 222 0072.