UK haulage operators are continuing to operate on extremely thin margins of around 2%, while overall operating costs rose by almost 6% over the past year, according to the latest industry cost and pay data. The figures underline the financial pressure facing the sector at a time of weak economic growth and persistent structural challenges.
The Haulage Cost Movement Report 2025 shows that non-fuel operating costs increased by 5.91% year on year, while profitability across the sector remained largely unchanged at around 2%. This combination leaves operators with little capacity to absorb further cost increases or unexpected shocks.
As RHA managing director Richard Smith put it:
“With further companies sliding into administration this year and with profits lower, firms are still having to make savings wherever possible. For many operators, this was a year of tough decisions: delaying investment, consolidating operations, and prioritising survival.”
Employment costs rise faster than pay
One of the largest contributors to rising costs is labour. While driver pay increases remained relatively modest, the overall cost of employing drivers rose by around 6%, driven mainly by higher employer National Insurance contributions and statutory wage pressures.
The RHA Pay Report 2026 shows that the median pay increase for drivers was 3%, significantly below the UK median earnings increase of 5.3%, based on Office for National Statistics data. Nearly 30% of operators awarded no pay rise at all, highlighting the limited financial headroom available to businesses.
Despite restrained wage growth, operators continue to report concerns about their ability to attract and retain staff, particularly in skilled roles such as technicians, fitters and experienced HGV drivers.
Driver shortage remains unresolved
The cost pressures come against the backdrop of a continuing driver shortage. The industry is expected to require around 60,000 new HGV drivers each year over the next five years, while more than 100,000 drivers failed to renew their Driver Qualification Card (DQC) last year, meaning they are currently unable to drive legally.
While demand for freight has been subdued, the data suggests that capacity constraints could quickly re-emerge if volumes recover.
Confidence at long-term lows
Business confidence across the logistics sector remains weak. The Barclays–BDO Logistics Confidence Index has fallen to its lowest level in 14 years, reflecting ongoing concerns about costs, demand and economic uncertainty.
Although the number of insolvencies has eased slightly compared with last year, failures remain well above long-term averages, reinforcing the sense that many operators are focused on survival rather than growth.
Fuel duty relief offers only temporary support
The government’s decision to maintain the fuel duty freeze until September provides some short-term relief. However, the planned reversal of the 5p fuel duty cut later in the year, followed by further increases, is expected to place additional strain on operators’ cost bases.
Fuel remains one of the most volatile and difficult costs for hauliers to manage, particularly for smaller fleets with limited ability to hedge price movements.
Crime and decarbonisation add further pressure
Operators are also facing rising losses from freight crime, which has cost the UK economy more than £1bn since 2020, feeding through into higher insurance premiums and operational risk.
At the same time, the transition to zero-emission vehicles remains slow. Around 70% of HGV operators currently have no plans to introduce zero-emission trucks, with cost cited as a key barrier alongside infrastructure availability and operational constraints.
Little margin for further pressure
Taken together, the latest cost and pay data point to a sector operating with minimal financial resilience. With margins stuck at around 2% and costs continuing to rise, many operators report delaying investment, consolidating operations or cutting discretionary spending to remain viable.
The figures suggest that the scope for further pressure on UK haulage businesses is extremely limited.
