There has been a jump of almost a quarter in the number of transport and logistics SMEs experiencing significant financial distress compared to the end of last year, according to a new analysis.
RealBusinessRescue.co.uk, set up by Begbies Traynor to advise business leaders in financial distress, also said the number of start-up transport firms now struggling financially had increased by 60% during the last quarter, due to the pandemic.
It said there were now 19,000 SMEs battling against insolvency, a rise of 24%.
Significant distress was defined as businesses with CCJs of less than £5,000 filed against them, or else appeared to have sustained or marked deterioration in key financial ratios and indicators.
Shaun Barton, national online business director at RealBusinessRescue.co.uk, said one feature was larger logistics companies ‘eating up’ the acceleration of business in the sector.
He added that companies had also created their own delivery departments to avoid outsourcing work at a greater cost.
“The latest Q1 results demonstrate that for many SME and start-up businesses, the financial challenge of the pandemic will continue throughout 2021,” Barton said.
“With a 15% increase in the number of smaller sized companies reported to be in significant financial distress during Q1 of 2021 compared to the end of 2020, this continues the trend we have seen since the health and economic crisis first struck more than a year ago.”
He added: “The sector needs to stand firm in the hope that the unlocking roadmap begins to have a positive impact.”