Tale of two countries’ freight and logistics sectors – Canada and the UK - CPCS

Tale of two countries’ freight and logistics sectors – Canada and the UK

Damon Dhankhar

November 18, 2025

Does Canada’s Transportation 2030 Strategy provide a blueprint for the UK freight and logistics sectors? CPCS explores this question.

Key points

Canada’s strategic advantage: Canada enhanced freight and logistics performance through initiatives such as the Transportation 2030 strategic plan and NTCF, investing billions to strengthen trade corridors.
UK’s chronic underinvestment: UK’s transport and storage infrastructure investments rank among lowest of OECD nations, investing only 0.9% of real GDP vs Canada’s 1.9% in 2019.
Impact on logistics performance: UK’s logistics performance declined sharply between 2018-2023. Underinvestment, fragmented planning, capacity constraints, and lack of an overarching freight strategy hinder competitiveness.
Blueprint for UK reform: Canada’s model shows dedicated freight policies, funding initiatives and cross-modal planning could improve UK freight performance.

Why policy matters for trade competitiveness

The 2008 Global Financial Crisis (GFC) rattled the major economies worldwide by sharply reducing trade volumes[1] and logistics activity[2]. By 2009, both Canada and the United Kingdom experienced sharp declines in freight performance, falling to their lowest levels since the turn of the century[3].

While there are critiques[4] about government permitting and other challenges, Canada has consistently committed federal funds to improve trade infrastructure through initiatives such as the Asia-Pacific Gateway and Corridor Initiative (2006), National Trade Corridors Fund (NTCF) (2017) and the Trade Diversification Corridors Fund (NTCF) (2025). Yet, since the GFC, Canada’s logistics performance continued to fall. The release of the Transportation 2030 Strategy in 2016 marked a turnaround, introducing long-term policies and the NTCF to strengthen freight corridors, improve intermodal connectivity, and enhance global trade competitiveness, positioning Canada to meet rising freight demand and support its wider economy.

By contrast, decades of underinvestment, erratic spending, and fragmented policy coordination have weakened the UK’s logistics performance, as its freight infrastructure struggles to keep pace with competitor nations’ evolving freight networks. While the UK’s 10-year Infrastructure Strategy, published in June 2025, outlines a comprehensive plan that includes modernising national transport systems, it gives limited attention to freight, an omission that risks further constraining productivity and trade competitiveness.

On a positive note, the recently published Railways Bill, acknowledges the economic and environmental potential of efficient freight, introducing a statutory duty to promote rail freight and integrate freight into long-term planning. This is a welcome development, crucial to ensuring there is sufficient attention placed on the freight and logistics sector, and to support its competitiveness. Coupled with the proposed release of a new freight and logistics plan for the UK in late 2025, the sector appears to finally receive the attention it deserves.

This piece offers a perspective for how the UK may turn around its fortunes, and lessons that may be gleaned from Canada’s experience into new policies, initiatives and strategies.

The UK’s lagging infrastructure investment

The UK’s infrastructure investment has lagged behind global peers for decades. Even before the GFC, the UK consistently ranked lowest among G7 nations for infrastructure spending. Brexit further deepened the challenge: private investment in transport and storage fell by over 30%[5] in the two years after the 2016 referendum, reflecting heightened uncertainty. In 2022, the UK placed 28th out of 31 Organisation for Economic Co-operation and Development (OECD) countries for business investment[6] (ahead of only Greece, Luxembourg, and Poland).

Referencing gross fixed capital formation[7] (GCFC), the UK still invests a relatively small proportion of its Gross Domestic Product (GDP) into transportation and storage compared to its peers. Moreover, GFCF has continued to decline, indicating weak investor confidence isn’t offset by public investment, falling to just 0.9% of real GDP — its lowest level since before the Covid-19 pandemic. Compared with the same period, OECD countries invested 1.7x more in the transport sectors (1.6% of real GDP), while Canada invested 2x more (1.9% of real GDP). This is shown in Figure 1 below.

Figure 1: GCFC, transportation and storage, % of real GDP

What the UK’s low infrastructure spending means for logistics performance

While the UK’s low spending relative to GDP does not directly reflect infrastructure competitiveness, our review of Logistics Performance Indicators across these countries paints a concerning picture.

Despite featuring a mature transport system with fewer greenfield opportunities, the UK’s basic infrastructure quality ranked 40th out of 66 countries in 2025[8]. Performance indicators highlighting how the freight and logistics sector has been particularly affected, showing persistent decline.

Between 2018 and 2023, the UK’s Logistics Performance Index[9] declined across all six categories and overall logistics performance. Industry groups such as Logistics UK have called for urgent government action to address chronic underinvestment, road congestion, and border inefficiencies that continue to constrain competitiveness[10].

Table 1: The UK’s Logistics Performance Index category scores (out of five), 2018 and 2023

Logistics Performance Index category score	2018*	2023
Efficiency of customs and border management clearance	3.85	3.5
Quality of trade- and transport-related infrastructure	4.09	3.7
Ease of arranging competitively priced international shipments	3.69	3.5
Competence and quality of logistics services	4.04	3.7
Ability to track and trace consignments	4.10	4.0
Frequency with which shipments reach consignees within the scheduled or expected delivery time	4.32	3.7
OVERALL LOGISTICS PERFORMANCE INDEX	4.01	3.7

Source: The World Bank (* weighted aggregate to reflect changes between 2012 – 2018)

In the decade leading up to the GFC, the UK’s investment (gross fixed capital formation) in transport and storage infrastructure grew at 6% year-on-year[11]. Since then, growth has dropped to just 1.3%, with ageing legacy infrastructure (pre-GFC) likely sustaining logistics performance to around 2018.

The UK’s quality of trade- and transport-related infrastructure fell almost 0.4 points between 2018 and 2023. Coupled with border frictions caused by Brexit, the UK has taken a sharp dive in performance rankings, reaching a low of 19^th since records began in 2007.

Canada, by contrast, shows a positive jump from 2018 to 2023, especially in its quality of trade- and transport-related infrastructure, essentially inverting its position with the UK in all indicators as shown in Figure 2.

Peer OECD nations demonstrated slight improvements in most performance indicators (see Figure 2), while G7 nations didn’t show as severe fluctuations in ranking (see Figure 3), indicating the UK’s struggle was not systemic.

Figure 2: Logistics performance category score changes, 2018 to 2023

Figure 3: Logistics performance rankings, G7 nations, 2007 to 2023

The data tells a clear story of the UK’s struggling freight and logistics performance over the last decade compared to its peers. However, it is important to note that the freight and logistics market continues to be resilient against economic shocks and structural pressures. Despite persistent challenges, such as underinvestment, labour shortages, capacity limitations, rising costs, fragmented planning, and post-Brexit trade frictions, the sector still accounts for 12%[12] of the UK’s non-financial economy. This underscores its resilience and capacity to expand, especially if supported by a coherent national freight strategy and targeted infrastructure investment.

Canada Transportation 2030 prioritises sustainable growth and connectivity

Launched in 2016, Canada’s Transportation 2030 strategy set out a long-term vision to promote trade and economic growth, and build a cleaner, more sustainable transportation system that efficiently operates across all modes. The plan is built around five priority areas: the traveller, safer transportation, green and innovative transportation, waterways, coasts and the north, and trade corridors to global markets.

Under the fifth pillar, the federal government committed $10.1 billion to strengthen trade infrastructure and reduce supply chain bottlenecks. A key component is the National Trade Corridors Fund (NTCF), an 11-year (to 2028), merit-based program with a total envelope of $4.6 billion (as of 2022) to support projects that improve freight and logistics performance.

Specific focus has been placed on enhancing intermodal connectivity at port, rail and road interfaces, improving infrastructure resilience, and the digitalisation of existing logistics systems. The program promotes transparency and alignment between public and private priorities, earning strong industry support. The Shipping Federation of Canada has called it “highly successful” and urged its permanent establishment[13]. Additional measures under Transportation 2030 include $50 million for transport innovation and $50 million to develop a national transport data hub to improve system planning and efficiency.

By June 2025, the NTCF has supported 59 projects to completion[14], including increasing export capacity for containerised grain by ~20% at the Port of Montreal, and developing a digital platform for rail-network visibility to improve forecasting, capacity planning and stakeholder coordination. A further 155 projects have been granted funds across Canada.

A blueprint of the UK’s freight and logistics network

The UK Department for Transport has announced that a new freight and logistics plan will be released in late 2025, to be developed “closely with industry.” Industry and government stakeholders advocate a long-term, sector-specific plan to enhance connections to international gateways, unify fragmented planning, and overcome the short-termism that has historically hindered investment and system planning.

Despite their geographical differences, the UK and Canada share similar challenges. Both rely heavily on major trade partners (the EU and the US, respectively) and require strategic investment to strengthen trade corridors. Like Canada, the UK’s freight sector has expressed concern[15] over the lack of coordinated government leadership and a cross-modal perspective in planning. Both countries are also prioritising intermodal fluidity to improve the efficiency of their trade corridors. For Canada, the vast landmass and long distances between major economic centres underscore the need to improve connectivity. The NTCF and Trade Diversification Corridors Fund initiatives support improvements to cross modal freight connectivity on existing and new corridors. The UK, meanwhile, aims to improve rail freight share rail freight growth to reduce road congestion and improve cross-modal freight efficiency. In 2022, the UK set a target of at least 75% growth in rail freight by 2050, a challenging goal in a capacity-constrained network dominated by passenger services, and more recently, the Railways Bill to promote rail freight in long-term planning.

The UK could propose a program like Canada’s NTCF within the new freight and logistics plan to bridge public and private priorities. Merit-based calls for proposals can align with strategic goals and policies within the new freight and logistics plan. Ensuring investments support targets such as decarbonisation, economic growth, and cross-modal efficiency, would enhance collaboration, productivity, and innovation. Lessons from Canada’s experience show that while such programs are effective, timely approvals, transparency, and outcome reporting are critical[16]. A dedicated team with sufficient resourcing could ensure a smooth, competitive application process.

The UK has already taken positive steps: the National Infrastructure and Service Transformation Authority (NISTA) provide advice on major projects, and the July 2025 Infrastructure Pipeline improves visibility for investors and businesses. Furthermore, the Railways Bill introduces a statutory duty to promote rail freight and to establish a central freight team within Great British Railways to provide a clear single point of contact, responsible for championing the sector. Building on these initiatives, the upcoming freight and logistics plan can deliver a coherent strategy to address some of the most prevalent freight and logistics bottlenecks.

Ultimately, it’s crucial to address the inefficiencies in the UK’s freight network. After all, these are not just logistical challenges, they’re barriers to the nation’s economic growth, trade competitiveness, and global standing.

References

[1] Crowley, M. A., & Luo, X. (2011). Understanding the Great Trade Collapse of 2008–09 and the subsequent trade recovery. Economic Perspectives, 35(2), p. 44. Federal Reserve Bank of Chicago.

[2] Notteboom, T., Pallis, T., & Rodrigue, J.-P. (2021). Disruptions and resilience in global container shipping and ports: The COVID-19 pandemic versus the 2008–2009 financial crisis. Maritime Economics & Logistics, 23, 179–210. https://doi.org/10.1057/s41278-020-00180-5

[3] Organisation for Economic Co-operation and Development (OECD). (2025). Freight transport data: Canada and United Kingdom. OECD Data Explorer. Retrieved November 13, 2025, from https://data.oecd.org

[4] Western Transportation Advisory Council (WESTAC). (2024). Compass Report 2024: Transportation leaders catalyzing change. WESTAC. https://westac.com

[5] Office for National Statistics (ONS). (2025, September 30). Business investment within transportation and storage by industry. ONS. Retrieved November 13, 2025, from https://www.ons.gov.uk

[6] Institute for Public Policy Research (IPPR). (2024, June 18). Revealed: Investment in UK is lowest in G7 for third year in a row, new data shows. IPPR. Retrieved November 13, 2025, from https://www.ippr.org/articles

[7] an official measure of total investment used in Gross Domestic Product (GDP) accounting, factoring private, government, and household investment.

[8] International Institute for Management Development (IMD). (2025). World Competitiveness Ranking 2025: United Kingdom profile. IMD Business School. Retrieved November 13, 2025, from https://www.imd.org

[9] a benchmarking tool developed by The World Bank to measure trade logistics performance of countries.

[10] Logistics UK. (2025, June 10). Logistics spending will unlock growth, says Logistics UK. https://logistics.org.uk/media/press-releases/2025/june/logistics-spending-will-unlock-growth-says-logisti

[11] Office for National Statistics. (2025, October 31). Annual gross fixed capital formation by industry and asset. ONS. https://www.ons.gov.uk/economy/grossdomesticproductgdp/datasets/annualgrossfixedcapitalformationbyindustryandasset

[12] Logistics UK. (2021, June 16). NTCF-CSCT circular letter. Retrieved November 13, 2025, from https://logistics.org.uk/CMSPages/GetFile.aspx?guid=3352c27c-bb9c-4793-9a15-948d0faea40b&lang=en-GB

[13] Shipping Federation of Canada. (2021, June 16). NTCF-CSCT circular letter. Retrieved November 13, 2025, from https://shipfed.ca/wp-content/uploads/pdfs/circular_letters/2021-06-16-NTCF-CSCT.pdf

[14] Transport Canada. (2025, September 26). 05. The National Trade Corridors Fund. Government of Canada. https://tc.canada.ca/en/binder/05-national-trade-corridors-fund-1

[15] Transport Canada. (2022). Action. Collaboration. Transformation: Final report of the National Supply Chain Task Force. Retrieved November 13, 2025, from https://tc.canada.ca/en/supply-chain-canada/action-collaboration-transformation

[16] Office of the Auditor General of Canada. (2024, March). Report 4— National Trade Corridors Fund—Transport Canada. Reports to Parliament. https://www.oag-bvg.gc.ca/internet/docs/parl_oag_2024_03_04_e.pdf

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