Transport firms appear to be taking a more “moderate approach” to increased employment costs compared to other industry sectors, according to analysis by Parcelhero.
Latest ONS figures show that 40% of all businesses and 77% of companies with 10 or more employees reported that their staffing costs had increased.
The data showed there had been a 41% increases in firms with over 10 employees reporting an increase, including wages, bonuses, national insurance and pension contributions.
Worst hit was accommodation and food businesses, where 73.8% reported an increase in employment costs.
Parcelhero said the increase was largely as a result of increased employer NI contributions, as well as a 6.7% increase in the national living wage.
However, just 37.8% of transport and storage companies said there had been an increase.
David Jinks, Parcelhero head of consumer research, said: “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. It’s a stark contrast, for example, to the hard-hit accommodation and food sector: 22.8% of these businesses plan to reduce staff numbers to cope with increasing employment costs.
“It’s also significantly fewer than transportation and storage companies’ partners in the manufacturing and retail industries; 13.2% of manufacturers and 11.9% of retailers plan to reduce staff numbers in response to future rises in employment costs.”
“Similarly, only 15.3% of transport and storage firms plan to raise their prices to cover increasing employment costs.
“That’s the lowest number of companies of any sector planning price rises. For example, a whopping 48.7% of accommodation and food businesses plan to up their prices to compensate for increasing staff costs.
“It’s also a significantly smaller amount than transport and storage companies’ partner businesses. Of these, 32.6% of manufacturers and 32.5% of retailers say they will up their charges.”
Jinks added that more than a quarter (26.6%) of transport companies said they planned to absorb these costs within their profit margins: “If they can afford to swallow increased staffing costs within their profit margins, these figures appear to show that transport and storage sector companies are better set than many other industry sectors,” he said.
“However, the truth is that the majority of these businesses work with very slim margins in a highly competitive environment.
“As a result, their contracts may be so tight that they cannot pass on costs through increased prices.”
Jinks added: “Likewise, with 9.6% of transport and storage firms saying that they are already unable to meet demands because of a shortage of workers, getting rid of staff is simply not an option for many.
“Therefore, they have no choice but to swallow the costs that will eat into their already slim margins.
“How long this situation is sustainable remains to be seen.”
