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Rising costs leave transport and storage businesses unhopeful, report finds

Sophie Smith
07 June 2022

ParcelHero has said that rising energy costs are damaging the confidence of delivery and logistics operators, following the results of a Government business survey.

The home delivery service highlighted the Office for National Statistics' Business Insights & Impact on the UK Economy Survey findings, which revealed that 23.5% of transport and storage companies expect their turnovers to decrease this month.

The survey also found that transport and storage sector leaders were more pessimistic about the prospects for the month than those in any other sector.

Following closely behind was wholesale and retail businesses with 22.4% and manufacturing businesses with 20.4% expecting their turnover to decrease.

ParcelHero attributes this to a rise in business costs, which impacted 72% of transport and storage companies. This compared with increased costs reported by 54.2% of wholesale and retail traders and 61.6% of manufacturers.

Despite the rising costs, ParcelHero emphasised that only 32.6% of transport and storage companies were expecting to put up their prices to customers in June, the same as wholesale and retail traders. This is less than the 44.5% of manufacturers planning to increase their prices.

David Jinks, Head of Consumer Research at ParcelHero, said: "Parcels, logistics and warehouse operators clearly saw few reasons to celebrate the arrival of June, despite the Platinum Jubilee festivities.

"Transport and storage businesses often work on wafer-thin profit margins and are generally the first industry sector to feel the squeeze of events such as the war in Ukraine, soaring energy costs and Brexit. The problem for some companies in the transport and storage sector is that volumes have been falling back since the end of the online sales boom created by the pandemic. Yet, at the same time, they are facing escalating costs. 34.4% of those transport and storage businesses planning to increase their prices in June say the primary reason is higher energy costs."

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