Transport and storage companies are showing remarkable resilience in the face of rising employment costs, according to the latest business insights survey from the Office for National Statistics (ONS).
Unlike other sectors, many of which are cutting jobs or raising prices, logistics and delivery businesses are largely choosing to absorb increased costs.
The ONS survey, conducted in late May, shows that 40% of all businesses—and a striking 77% of companies with more than 10 employees—have seen staff costs rise over the past three months.
This figure has surged 41% since February, largely due to changes introduced in the April 2025 tax year, including higher employer National Insurance contributions and a 6.7% uplift to the National Living Wage.
While the accommodation and food sector is the hardest hit—with nearly three-quarters (73.8%) of firms reporting increased staffing costs—only 37.8% of transport and storage businesses have noted a similar rise.
The sector, which includes logistics, haulage, warehousing and parcel delivery companies, is faring better than manufacturing (45.6%) and retail (43.2%) counterparts.
According to Parcelhero, a leading home delivery specialist, firms in this sector are taking a more moderate approach to managing cost pressures.
“Only 4.8% of transport and storage firms plan to cut staffing levels to meet increases in employment costs. That’s the lowest number of planned layoffs of any industry sector,” said David Jinks M.I.L.T., Head of Consumer Research at Parcelhero.
“It’s a stark contrast to the accommodation and food sector, where 22.8% of businesses plan to reduce staff.”
Similarly, just 15.3% of transport and storage firms intend to raise prices—again, the lowest proportion of any sector.
In comparison, 48.7% of accommodation and food businesses and around a third of manufacturers and retailers plan to hike prices in response to increased wage bills.
Instead, over a quarter (26.6%) of firms in the logistics sector say they plan to absorb these costs within existing profit margins.
While this is less than the 42% of health and social work organisations doing the same, it still places the transport sector ahead of manufacturing (18.2%) and retail (24.1%).
However, Jinks warned that the strategy of absorbing rising costs is not without risk: “Most transport and storage businesses operate on razor-thin margins in a fiercely competitive environment.
"Many simply don’t have the flexibility to increase prices, nor can they afford to lose staff, especially when 9.6% say they’re already struggling to meet demand due to labour shortages.”