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BITA forecasts a strong 2021

In common with many other industries, the materials handling sector has been severely affected by the COVID-19 pandemic. But after the worst decline in memory, the signs are positive for a strong bounce-back in 2021, as BITA Secretary-General, James Clark explains.

The industrial landscape has changed dramatically during 2020 with a decline the like of which no one could have predicted. The COVID-19 crisis, and associated lockdown, together with the restrictions imposed on production has seen the UK economy plunge to hitherto uncharted regions.

But we are hopeful the decline will be short-lived, with the recovery just as dramatic. The findings of the latest Oxford Economics report suggest 2021 will see a strong uptick in the economy, with the materials handling sector reaping the benefit.

Given the shockwave to the economy in the last six months, accurately predicting forthcoming market trends has been extremely difficult, with a possible second wave of coronavirus and the outcome of post-Brexit trade deals playing havoc with expert scrutiny. Nonetheless, the Oxford Economics forecast, which is released twice a year exclusively to BITA members, has proved a reliable barometer on the health of the economy down the years, as well as predicting the likely trends the industry will see in the months ahead.

It expects the second quarter of 2020 to mark the trough of the coronavirus recession, after which the economy will gradually improve as industry reopens. Evidence in the report suggests the low point in new bookings was reached in May with June showing a strong increase. If the pattern continues then growth during 2021 is expected to increase by almost a quarter.

The counterbalance market was already struggling prior to the pandemic - most notably in Class 4/5 bookings. Not surprisingly, the global pandemic has done this no favours, with the classes showing deep falls. The report forecasts a gradual recovery into 2021, although the market is expected to remain sluggish, reflecting the likely pattern in UK industrial production.

For the counterbalance sector as a whole, while the decline in bookings will be steep, the recovery will be equally dramatic, possibly exceeding the overall trend. End-users may also be persuaded to upgrade fleets to new, more efficient trucks which could deliver long-term cost-savings.

While orders across the warehouse sector have also been impacted by the coronavirus-induced recession, the decline has been less marked. A change in shopping habits due to lockdown is thought to be a contributory factor in this.

A growing trend

While high-contact consumer-facing sectors were weakened by measures aimed at controlling the spread of the pandemic, the boom in the e-commerce sector due to people shifting to online shopping had a welcome benefit for the warehouse industry. Likewise, supermarkets had to expand their warehousing operations to meet rising demand for consumables. If this trend continues after lockdown then further expansion may be required, which could also have a knock-on effect for the MHE sector.

Regardless of this, the report forecasts the pick-up in the market continuing into 2021, with a subsequent rise in truck orders.

Given what we have all had to endure this year, let us hope that the forecast proves to be just as reliable as other Oxford Economics down the years have proven.

Regardless of what happens, it appears the industry stands at something of a crossroads with developments in technology likely to shape the future direction of the materials handling sector.

On track

External factors are already having a bearing on this. The Government’s target to achieve net zero carbon emissions by 2050 has focused the minds of truck manufacturers and it is now incumbent on all to seek out new, more energy efficient and less environmentally harmful ways of undertaking everyday materials handling activities.

BITA is advocating the use of greener, more-efficient fuel sources and several of these are already being pioneered as the move to scale out diesel engines continues.

While BioLPG provides a ‘drop-in’ solution to immediately reduce a forklift’s carbon footprint without the need to invest in new equipment or technology, more advanced fuel sources are also in the process of being introduced.

A new report, to which BITA has contributed, outlines current thinking. The report, – Lowering the carbon emissions of fork lift trucks – produced by Calor, is based on an independent survey of more than 100 materials handling end-users. It reveals 95% of those working in the materials handling industry believe much more needs to be done to lower their carbon emissions.

But despite the best of intentions, businesses continue to prioritise cost, fuel efficiency and minimising downtime over carbon reduction when choosing how their fork-lift trucks (FLTs) should be powered.

This thinking has to change and in order to do so, the UK Government needs to show strategic leadership with a stronger focus on infrastructure investment and support of technology/demonstrator hubs.

To read the Calor Report, visit:

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