The road freight sector put in a steady end of year performance in 2017, with sales, employment and wages up while the company failure rate fell.
According to the latest quarterly Creditsafe Watchdog report, which looked at the performance of over 110,000 companies in the transport and logistics sector, sales rose in the road freight sector to £36b (Q3 2017: £35.7bn) while retained profit rose 5% to £387.4m (Q3 2017: £368.5m) .
The road freight sector’s wage bill also continued its upward trend increasing to £9.2bn (Q3 2017: £9.1bn) as employment in the sector rose 11%, from 210,572 in Q3, to 233,809 in the final quarter of 2017.
The number of active companies also leapt 8% in the period up from 53,518 in Q3 to 58,039 in the final quarter.
Failures moderate
The rate of road freight company failures moderated in the period, rising 18%, from 95 to 112 failures, compared to a leap of 102% in the previous quarter.
The most recent largest-company failure in the sector was Doncaster-based Regent Haulage Services, which had an annual turnover of £2.7m. It went into voluntary liquidation in November last year.
However, despite the slowdown in company failures, the report also revealed that companies deemed to be at very high risk rose markedly, up 20% from 484 in Q3 to 585 in the final quarter of the year.
However, companies with bad debts fell 18% from 165 in Q3 to 134 in Q4. The average bad debt more than halved too from £7,403 to £3,045, and the total of bad debt for the sector fell from £1.2bn in the third quarter to £407,990 in the final quarter.
Rachel Mainwaring, operations director at Creditsafe, said the road freight sector had performed well compared to the wider transport and logistics sector, which had seen a “mammoth jump” in company failures.
She added: “In road freight specifically, we have also seen a similar upwards trend across sales, active companies, employment and wages, as well as an increase in company failures of 17.89%.
"With the figures in road freight showing smaller swings, there appears to be less volatility in this area than across the sector as a whole.”
