Thinking of launching a startup logistics company? Here's three reasons why you shouldn't!

17th September 2025

Here's three reasons why you shouldn't!.

When the Government asked logistics professionals what factors make it difficult for startups to succeed in their industry, the responses were eye-opening. The home delivery expert Parcelhero says anyone planning a startup transport & storage sector business should read this survey first.

If any budding entrepreneur is thinking their plan for a new transport & storage sector business could be the next big unicorn, it’s perhaps time to think again. The Government’s Office for National Statistics (ONS) latest Business Insights Survey asked logistics professionals what factors would make it difficult for startups to succeed in their industry. The answers are disheartening for would-be logistics billionaires, says the home delivery expert Parcelhero.

It says the responses of transport & storage sector professionals (the category which includes logistics, parcels, haulage and warehousing employers) do not paint a great picture for anyone planning to launch a new haulage or supply chain business.

Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘In reverse order, here are transport & storage industry professionals’ top three reasons startups may not succeed.’

3: Regulatory requirements

‘A total of 30.9% of transport & storage sector businesses responding to the survey stated that regulatory requirements make it difficult for startups to succeed in their industry. That was a larger amount than any other business sector. For example, looking at their retail and manufacturing partners, only 18.5% of retailers and 17.9% of manufacturers named regulatory requirements as a potential hindrance to startups in their sectors.

‘Freight and logistics are heavily regulated to protect safety, employment rights and sustainability. Regulatory issues currently facing companies include significant new post-Brexit rules and red tape on goods transported between the EU and the UK, including new procedures for Northern Ireland. That’s by no means all. Among other regulatory hurdles are navigating new US tariffs; the phasing out of sales of diesel trucks of 26 tonnes or less by 2035 and all heavier trucks by 2040 (though the Government may be going a little wobbly on this); stricter international ELD electronic logging rules to enforce driver rest time and increasingly tight EU-compliant environmental packaging regulations.’

2: High upfront financial investment

‘The second largest hurdle for startups is the amount of upfront financial investment needed to launch a transport & storage sector business. 32.5% of responders said this is a factor. In contrast, only 23.2% of construction companies, for example, named financial investment as a significant issue for startups.

‘The fact that financing presents a problem for transport & storage startups is unsurprising. The cost of a truck fleet is significant, even if the vehicles are leased, as is their ongoing maintenance. Likewise, purchasing or renting warehousing comes at a huge cost. Savills recently reported that between 2015-2024 prime warehousing rents saw growth of 69%. Warehousing in London, in particular, is some of the most expensive in the entire world. It’s no wonder that many professionals are concerned for startups facing these expenses.’

1: The challenging competitive environment

‘With many companies working on tight margins, the competitive environment was the single largest reason (35.6%) transportation & storage sector professionals gave for why startups would struggle.

‘This result comes as no surprise. A previous ONS Business Insights survey, conducted during early August, revealed 33.2% of transport & storage firms employing 10 or more staff said competition was currently impacting their business. No other industry sector reported such a high number. To put that into context, only 23.5% of their manufacturing partners employing 10 people or more said that competition was currently impacting their business turnover.

‘As we have said before, larger UK 3PLs (third-party logistics companies) are working to very tight contracts with lean profit margins and little wiggle room to cover unexpected cost increases. However, it’s not just 3PLs. Competition is an issue that is impacting companies across the supply chain and logistics industry. It is no wonder that many long-established names in haulage have failed in recent times.

‘On the other hand, while heavy-haulage companies may be struggling, some sectors of logistics, such as home deliveries, are set for continued expansion. That’s because the UK’s eCommerce Market is projected to reach around £96bn ($131.38bn) in 2025, rising by 3.93% CAGR to £117.3bn ($159.31bn) by 2030, according to the statistics company Statista. One certainty is that it will be those transport & storage companies that are partnered with retailers with strong in-store and online sales that will ultimately triumph. To find out more, read Parcelhero’s influential report “2030: Death of the High Street” at: https://www.parcelhero.com/content/downloads/pdfs/high-street/deathofthehighstreetreport.pdf