Company failures in the road freight sector more than doubled in the third quarter of this year, outstripping the 81.5% increase in the transport and logistics sector as a whole, according to the latest Creditsafe Watchdog Report.
The Watchdog report, which looks at the quarterly performance of over 114,000 companies in the transport and logistics sector, revealed that 95 road freight companies went under in Q3, compared to 47 road freight company failures in the previous quarter; a rise of 102%.
Most notable road freight sector failures in the period were Felixstowe container haulier Searon Logistics, which went under in July 2017 and TT Express (Oldham) which closed its doors in September this year.
The number of road freight firms whose financial health is deemed very high risk by the report also rose in the period from 452 in Q2 to 484 firms in Q3, with firms rated at moderate risk rising by 2,753 in the quarter to 24,966.
The road freight sector also saw a substantial rise in County Court Judgements up by a third (33.3%) in Q3 to 268 CCJs, worth a combined £841,002 compared to 201 CCJs, worth a total of £745,464, in Q2.
While the financial health of the transport and logistics sector improved in the period with double digit decreases for both company and supplier bad debts, the road freight industry saw bad debt owed to companies leap by 20% to £1.2m and the amount owed by companies to suppliers up by 16.9% to £3.8m.
On a brighter note, the road freight sector saw the number of active companies rise by 5.5% from 50,720 to 53,518 in the period, with employment numbers also on the rise, up 5.1% from 200,237 to 210,572 employees.
Despite the rise in company failures, Creditsafe operations director Rachel Mainwaring said the outlook remains positive for the road freight sector.
“We’ve seen a healthy quarter from the transport and logistics sector, supported by positive figures from road freight.
“While the number of road freight company failures is a cause for concern, having doubled in the past quarter, the strength of sales and company growth suggests a strong end to the year for the sector as a whole,” she said.
