You can specify compression and encryption option for log shipping data here:

• Use data compression - Select this option to to compress the output data .
• Compression levels - There are 10 levels for data compression. 0 is lowest level, it fast but no compression , 9 has the highest compression ratio , but slow , because it use more CPU to compression data.

Encryption settings

• Use data encryption - Select this option to encrypt the output data.
• Key type - This is a key length option . For 128 bits , you can specify a password as long as 16 letters , 192 bits means you can specify a password not more than 24 characters  , 256 is for a 32 characters. 
• Encryption key - The password to protected your backup .
  Important : If you lost your password, you will not be able to recover the backup file.
• Confirm - Confirm your password.