Current Cost of Doing Business 2025
Industry Insights
SUMMARY
In 2025, businesses across the Durable Medical Equipment industry are facing steady increases in operating costs. Labor remains a major pressure point, with wages rising to keep pace with workforce shortages. Energy and facilities costs are climbing modestly, adding to the strain on day-to-day operations. Freight expenses are being driven up by surcharges from major carriers, while rent and packaging costs continue to trend upward. To stay competitive, companies will need to focus on workforce retention, reevaluate logistics strategies, and plan for higher facility and material expenses.
WAGES
• Compensation costs have increased by 3.8–4.2% in 2025, driven by continued labor shortages and inflation.1
• Warehousing and logistics roles remain competitive, with companies offering higher wages and expanded benefits to attract and retain talent.2
ENERGY & FACILITIES
• Facilities Management (FM) costs are projected to rise by 2.7% in 2025, slightly above the 2024 rate.2
• Energy prices remain volatile, indirectly impacting facilities maintenance service contracts (e.g., landscaping, HVAC) due to higher fuel and input costs.2
Compensation costs have increased by 3.8–4.2% in 2025
4.2%
Facilities Management (FM) costs are projected to rise by 2.7% in 2025
2.7 %
FREIGHT / TRANSPORTATION
• FedEx and UPS base rates are stable, but surcharges have increased by up to 72% in 2025. 3
• Parcel delivery remains vulnerable to pricing pressure, especially for lightweight and oversized shipments.3
• Regulatory uncertainty and geopolitical shifts are adding cost unpredictability across transport modes.3
surcharges have increased by up to 72% in 2025
72 %
GENERAL COSTS
Corrugated cardboard prices are projected to rise by 6–8% in 2025 due to raw material and logistics costs.3
Industrial rent has increased by 5.1% year-over-year, driven by demand for last-mile distribution hubs.3
Warehouse space costs are up 9.2% from 2023 to 2025, reflecting continued pressure on logistics infrastructure
SUMMARY
8 %
5.1 % 9.2 %
In 2025, the cost of doing business continues to rise across several critical categories, placing sustained pressure on the distribution industry, including providers of home and durable medical equipment. Labor costs remain a primary driver, with wage growth holding steady as companies compete for talent amid ongoing workforce shortages. Facilities management and energy expenses are also climbing modestly, reflecting broader inflationary trends and infrastructure demands. Freight costs are being pushed higher by surcharges, particularly from major carriers like FedEx and UPS, while operational expenses, including rent, packaging materials, and warehouse space—are trending upward due to increased demand and limited supply.
KEY TAKEAWAYS
1. Businesses must prioritize labor retention strategies to manage rising wage pressures effectively.
2. Logistics partnerships should be reassessed to mitigate the impact of increasing freight surcharges.
3. Operational budgeting should account for continued increases in rent, packaging, and warehouse costs.
VGM Industry Insights provides data-driven analysis and trends within the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) sector. Our focus areas include market trends, innovation, and strategic decision-making, helping stakeholders stay informed and competitive. We are committed to a forward-thinking approach, continuously monitoring industry developments to drive progress and innovation.
ALAN MORRIS SVP of Strategy
TYLER COULANDER Market Strategy Manager
