What is the UK’s ‘Modern Industrial Strategy 2025’?

14th July 2025

Given the turbulence facing most businesses (and people) at the moment, everyone is looking for ways to improve resilience. The UK government is no exception, and the plan it has presented looks to be momentous. The Modern Industrial Strategy 2025 is aimed squarely at the logistics sector, and aims to provide a long-term strategy to secure the future for UK supply chains.

The strategy has arrived with plenty of fanfare and no small amount of investment. However, the scale of the issues facing the sector is such that some scepticism is natural. As a result, we thought we’d take a deep dive into the proposals in the Modern Industrial Strategy 2025—exploring what it is, what it aims to deliver, and whether the government’s plans are either practical or likely to be effective.

What is the Modern Industrial Strategy 2025?

The Modern Industrial Strategy 2025 (MIS) is the UK government’s attempt to future-proof the nation’s industrial and logistics infrastructure. Designed to provide a blueprint for the next decade and beyond of economic growth, the MIS aims to harness the UK’s core strengths to take advantage of emerging economic opportunities, while also addressing the challenges raised by Brexit, the COVID-19 pandemic, geopolitical instability, and climate change.

The strategy represents something of an economic reboot for the UK, which has arguably struggled to find its place since leaving the EU, and the impact this had on its world-leading finance and services sectors. The MIS aims to provide some course correction, supporting the growth of key industries in which the UK can realistically not just compete, but establish itself as a world leader.

Areas of focus in the Modern Industrial Strategy include AI, clean energy generation, and life sciences, among others. The strategy lays out plans to support these sectors and the broader UK economy, through initiatives such as lowering energy costs, increasing the quality of the UK workforce, trade deals and initiatives, and the strengthening of UK logistics and supply chain resilience, among other factors.

The Modern Industrial Strategy and logistics

The Modern Industrial Strategy focusses on five key areas to achieve sustained economic growth:

1. Supply chain resilience

If the last decade has shown anything, it’s how fragile modern supply chains can be. The MIS puts a heavy emphasis on shoring up key industries against potential supply chain shocks, with a focus on encouraging more domestic production of essential goods such as pharmaceuticals, semiconductors, and energy components which have proven to be particularly vulnerable to geopolitical events.

A key part of this effort is the launch of a national Supply Chain Centre, which will coordinate public and private investment in strategic freight corridors, intermodal infrastructure, and warehousing clusters. The centre aims to act as a national hub to help identify vulnerabilities in the UK’s supply chains, and prioritise improvements across the UK’s logistics network.

To support this, the government has also introduced the Strategic Sites Accelerator, a £600 million fund aimed at unlocking new logistics and industrial development. This initiative is effectively the strategy’s ‘resilience investment vehicle’, helping to fast-track upgrades to critical infrastructure that will enhance the flexibility of national supply chains, and reduce the UK’s dependence on fragile overseas trade routes.

2. Sustainable and green logistics

In line with the UK’s broader environmental ambitions, the MIS is interwoven with the UK’s push for net zero. While a broader logistics strategy is pending for later this year, the MIS dovetails with announced investments totalling around £1.5 billion supporting the transition to low and zero-emission freight. These include electrified rail projects and the rollout of hydrogen-powered HGVs, as well as better charging and fueling infrastructure across the country, including the development of ‘hydrogen hubs’ to distribute the resource.

The MIS aims to support key sustainable logistics targets, including:

• A 30% reduction in freight emissions by 2030;
• All new heavy goods vehicles to be zero-emission by 2040; and
• Incentives for shifting from road travel to rail or inland waterways.

One aspect explicitly mentioned in the MIS is the Freight Innovation Fund Accelerator. Companies looking to adopt greener logistics practices will be able to apply for grants, tax breaks, and R&D support under this scheme, with  £7 million over three years aimed at funding innovative technology and processes across rail, road, maritime, and air freight. This complements the £200 million committed to trialling hydrogen and battery‑electric trucks, as well as the aforementioned rollout of around 57 charging and refuelling sites.

3. Digital transformation

One of the key tenets of the Modern Industrial Strategy is the belief that innovation is essential to building a world-leading logistics system. The intention is for the sector to better utilise new and emerging technologies such as AI, blockchain, IoT, and data analytics to optimise performance, reduce bottlenecks, and eliminate waste.

One of the concepts floated by industry experts is a ’digital freight corridor’, where integrated data-sharing systems would create an active link between ports, customs, hauliers, and retailers. The aim would be to create greater visibility and coordination across the supply chain, synchronising data from the warehouse to final delivery. This would inevitably involve greater optimisation of both transport vehicles and warehouses themselves, with stock management systems and smart racking both tracking goods more accurately and expediting distribution.

£800 million has also been committed to upgrading digital infrastructure, with a special emphasis on smart warehousing, automated ports, and next-gen inventory management systems. All of this represents the implementation of existing technologies and ideas which could be put in place today, and bring transformative benefits to the sector.

4. Workforce and skills development

One of the most pressing issues facing the logistics industry is a chronic labour shortage, exacerbated by Brexit and an aging workforce. The MIS aims to tackle this through the establishment of a taskforce to coordinate with education providers, training centres, and employers, and coordinate efforts to upskill both new and existing workers.

Initiatives are likely to include an expansion of apprenticeships in HGV driving, logistics tech, and warehouse automation, as well as funding for retraining programmes for displaced workers. A Global Talent Taskforce is also being set up to help recruit top talent from abroad, along with targeted exemptions for the Skilled Worker visa, and an expansion of apprenticeship opportunities to reach more young people.

5. Infrastructure modernisation

No industrial strategy would be complete without major infrastructure investment. The government has pledged over £6 billion towards modernising transport links, upgrading ports and intermodal hubs, and expanding warehousing capacity in key locations.

Priority projects include:

• The expansion of HS2 freight capacity;
• Upgrades to major UK ports such as Felixstowe, Southampton, and Liverpool; and
• Investment in freeports and customs-friendly logistics zones.

While these might be seen as belated investments by some companies impacted by Brexit, they are more than welcome, and should help to facilitate smoother, faster, and more secure movement of goods both within and beyond UK borders.

Ambition vs reality

There’s no denying the ambition of the Modern Industrial Strategy. The government has presented a comprehensive roadmap that touches on most of the problem areas in today’s logistics ecosystem, and addresses many of the complaints forwarded by the industry during an extensive consultation period.

However, several questions remain about the feasibility of these proposals. Much of the investment is front-loaded, but many of the tangible benefits—such as decarbonisation and digital integration—aren’t projected to bear fruit for years or even decades. In the short term, businesses are likely to still face the same disruptions and cost pressures that have plagued them in recent years, and caused such fragility in supply chains.

The second potential problem is execution. The UK government’s track record on delivering large infrastructure and technology projects is mixed at best (albeit that major projects such as HS2 were conducted under the previous administration). While funding commitments always look impressive on paper, successfully implementing these ideas will require close and continuous collaboration with the industry, local authorities, and international partners, something that’s much easier said than done.

The third problem is the political climate. With any long-term plan such as this, there is the inevitable potential for a change in leadership, something that currently looks quite likely come the next General Election. This will inevitably lead to uncertainty among businesses as to whether future governments will maintain the same level of commitment to the MIS. While there is broad cross-party support for improving logistics resilience, specific policy tools and funding could shift, making it difficult to plan for the future.

The impact on logistics

So far, the logistics sector has cautiously welcomed the strategy. The Confederation of British Industry (CBI) has broadly welcomed the proposals, noting that many of its requests were included in the strategy, including a range of investments to boost growth, a new Growth and Skills Levy, simplified regulations, and energy investment. However, it has also pointed out areas where plans still feel slightly incoherent, including tech adoption and immigration strategy.

The Road Haulage Association (RHA) has praised the focus on decarbonisation and skills development, but lamented that the freight sector specifically wasn’t designated as foundational, and called for more immediate support on fuel costs and driver shortages. The British Ports Association meanwhile welcomed the status of ports as foundational, and the pledge of support for reducing electricity costs and accelerating connections to the grid.

The reaction overall has been positive, but it’s also clear that for all the areas touched on by the strategy, not everything has been explored in equal depth. This is partly to be expected of such a wide-reaching strategy, assembled in less than a year by a new government. However, this is clearly a starting point more than a comprehensive roadmap, and something that will require further consultation and interaction—perhaps making it less useful and less of a ‘hard reset’ than some people might have been hoping for.

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The Modern Industrial Strategy 2025 is certainly an encouraging sign for the logistics sector at a time of immense pressure, and speaks to the government’s desire to build resilience, and bolster the UK’s supply chains. However, it is more of a starting point for future success than a magic bullet for the sector’s problems.

Whether or not it succeeds will depend on its execution, but also continued collaboration with businesses and industry bodies. The good news is that the government does appear to be listening—the question is how long they remain in place to do so, and how much can be achieved in the few years they might have to execute it.