Big deals
Larger-scale contracts are thin on the ground but 3PLs may hold the key, argues Dave Berridge, secretary of AMHSA.
THERE HAVE been a few very large-scale automation projects in the UK this year – for the likes of Tesco, M&S, Amazon, Home Bargains and DHL – with AMHSA members having been heavily involved in some. However, our members are generally reporting a decline in the scale of projects, with growth being focused in smaller automation contracts, particularly featuring mobile automation.
The reasons are clear: uncertainty – due to geopolitical tensions and the macroeconomic downturn – and rising costs, fuelled by labour shortages due to an ageing workforce and the shifting expectations of younger workers, who are less willing to accept the irregular working hours that underpin today’s 24/7 logistics operations.
Rising reliance on 3PLs
In response, retailers and manufacturers are increasingly outsourcing their storage and distribution activities to third-party logistics providers (3PLs), enabling them to scale their operations up or down as required. 3PLs tend to have access to a larger pool of labour and are better able to invest in advanced automated and digital technologies, enabling them to secure productivity gains and cost savings.
According to global real estate advisor, Savills, reliance on 3PLs is on the rise. The increase is currently fastest in the US, where 3PLs represented 42% of total warehouse take-up in the second quarter of 2025 – a rise of 12% year-on-year. The Asia Pacific region shows steady growth, with 3PLs accounting for 46% of total warehouse take-up in Q2 2025. In Europe, the figure was lower, at around 33%, but 3PL use has been rising gradually over the past two years. So, 3PLs may hold the keys to the elusive larger-scale automation projects over the next few years.
Mobile automation
Attractive though the big contracts are, there are plenty of smaller fish to fry. While market analysts have downgraded short-term forecasts for both fixed and mobile automation, the latter remains on a strong upward trajectory. The huge potential for AMRs in production and distribution environments will undoubtedly drive growth in the UK and European logistics automation markets in the short term. In addition, an ever-increasing number of automated handling technologies are modular and scalable, enabling companies to start small and expand their systems over time. What’s more, the availability of flexible financing models enhances these possibilities.
For more information, visit www.amhsa.co.uk
07517 610514
