Rising fuel, labour and operating costs across the logistics sector risk creating renewed inflationary pressures across the UK economy, Logistics UK is warning.
The warning follows the publication of Logistics UK’s latest Manager’s Guide to Distribution Costs 2026 which has revealed that in the year to April 2026, vehicle operating costs rose by 12% driven largely by a 36% rise in diesel prices, a 7% increase in vehicle insurance costs and an almost 8% growth in driver employment costs.
In addition, warehouse rents also increased. Prime industrial rents for warehouse units of 50,000+ square feet now average £13.38 per square foot - a 13% increase in the year to Q1 2026.
Ben Fletcher, Logistics UK chief executive, said: “For many logistics operators, the only economically feasible way to manage these significant cost increases is to pass them on to their customers.
“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 organisation’s Manager’s Guide to Distribution Costs 2026 is published during ongoing worldwide economic disruption caused by the situation in the Strait of Hormuz which, according to Logistics UK, has placed pressure on global supply chains and contributed to higher fuel costs:
Fletcher said: “Fuel represents around one third of the operating cost for an HGV and 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 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.
“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.
“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 Manager’s Guide to Distribution Costs 2026 draws on the latest financial data and the operational experience of Logistics UK members to quantify the operating costs faced by logistics businesses, including wage trends, haulage rates and warehouse costs.
