The latest Office for National Statistics (ONS) Business Insights report has revealed transport and storage companies were forced to pass on higher costs to customers in April, with home delivery firm ParcelHero warning this will raise retail prices and the cost of home deliveries.
ParcelHero’s head of consumer research, David Jinks, said: “It’s not only households that are facing steep rises in costs. Transport, logistics and warehousing companies have also faced significant increases in the cost of energy and materials, and many are being forced to pass these on to their own customers.”
The company explained that 37.3% of transport, distribution and warehousing companies increased rates in April because 56% of companies in this sector faced rises in costs during March. With a total of 17.5% of transport and warehousing companies reporting that turnover decreased in March.
“Of course, it is shoppers who will pay the price for rising supply chain costs, and they will end up spending more for food and goods in the next months,” added Jinks.
The research did find that 25.3% of transport, delivery and warehousing companies plan to keep on absorbing increased costs themselves, rather than pass them on, or even reduce costs.
“This underscores the fact that transport and storage sector companies are by no means the worst offenders when it comes to quickly passing on costs,” Jinks noted.
Some 45.1% of accommodation & food services companies and 42.6% of construction companies said they were increasing the price of goods and services in April.
There was also some good news for employees in the transport and warehousing sector, the report found as even though costs for companies were rising fast, none of the businesses said they were planning redundancies, and only 4.2% planned any decrease to staff working hours.
“Many haulage and courier companies operate on relatively low margins, so the sector has little protection or wiggle room against increases in fuel and equipment costs. To find out more about how logistics companies and their partner retailers are innovating to reduce costs and maximise the potential of technology,” Jinks concluded.
