Soaring logistics costs could push prices higher across the UK, as transport operators struggle to absorb sharp increases in fuel, wages, insurance and warehouse rents.
New analysis from Logistics UK shows vehicle operating costs rose by more than 12% in the year to April 2026.
The increase was driven largely by a 36% rise in diesel prices, alongside a 7% increase in vehicle insurance costs and almost 8% growth in driver employment costs.
Logistics UK warned that operators working on narrow profit margins may have little choice but to pass those additional costs to customers.
That could ultimately result in higher prices for businesses and consumers across the economy.
Logistics UK chief executive Ben Fletcher said: “For many logistics operators, the only economically feasible way to manage these significant cost increases is to pass them on to their customers.”
He added: “As logistics businesses operate on extremely narrow margins and underpin every sector of the economy, these increases risk feeding through to the prices we all pay as consumers.”
The warning is contained in the organisation’s annual Manager’s Guide to Distribution Costs 2026, which examines the financial and operational pressures facing logistics businesses.
Its publication comes amid continued disruption to international trade linked to the situation in the Strait of Hormuz.
Logistics UK said pressure on global supply chains had contributed to higher fuel prices and renewed concerns about the resilience of freight networks.
Fuel accounts for about a third of the operating cost of a heavy goods vehicle, making operators particularly vulnerable to sudden changes in diesel prices.
Fletcher said: “A 36% rise in the price of diesel represents a sharp and unbudgeted increase in the cost base that would be difficult for any business to absorb, let alone those that often operate on margins of just 2-3%.”
The organisation said disruption to freight movements through the Strait of Hormuz had demonstrated how quickly international events could affect the cost and availability of goods.
Those pressures can be felt across manufacturing, retail, hospitality, healthcare and online commerce, all of which depend on reliable transport and distribution networks.
Fletcher said: “The Middle East conflict and disruption of freight flows through the Strait of Hormuz have renewed pressure on global supply chains and highlighted the need for resilience in the way our goods are moved, whether for manufacturing, retail, hospitality, healthcare or e-commerce.”
Logistics UK argued that the sector could help strengthen economic growth and resilience, but warned that its ability to do so depended on a supportive policy environment.
The organisation called for measures that would allow businesses to invest, manage rising costs and maintain efficient supply chains.
“Our sector has the capacity to be a powerful catalyst for growth and resilience across the whole economy, but its ability to do this is by no means guaranteed,” Fletcher said.
He added: “The cost increases outlined in our report are hitting businesses hard and demonstrate why we need a policy framework that supports the logistics sector to drive the economy forward.”
The guide draws on financial data and the operational experience of Logistics UK members.
It assesses a range of expenses faced by transport and distribution businesses, including wages, haulage rates, vehicle costs and warehouse charges.
The report found that the pressure was not limited to road transport.
Prime industrial rents for warehouse units larger than 50,000 square feet reached an average of £13.38 per square foot during the first quarter of 2026.
That represented a 13% increase over the previous year, adding further pressure to businesses already dealing with higher fuel, staffing and insurance bills.
Logistics UK updates the guide every quarter to reflect changing economic and operating conditions.
The organisation represents businesses across road, rail, water and air freight, as well as retailers and manufacturers that depend on the movement of goods.
It said more than seven million people were directly employed in making, selling and moving goods, underlining the sector’s importance to the wider UK economy.