A Felixstowe-based transport and warehousing company collapsed following a decision by the nearby port to terminate its storage agreement, according to administrators.

Karl King Transport operated 60 HGVs split between three depots, including premises within Felixstowe Port, which were used to service its major customer Aldi.

Expansion of this contract in 2018 meant it had to source premises with additional capacity and as well as a warehouse at the port, administrators at Parker Andrews said the haulier also struck a deal to have extended free use on Felixstowe quay.

But in March 2019, it said the port “purported to terminate the separate agreement, which had a devastating effect on the company’s business, including a significant reduction in the import storage of containers for Aldi".

This prompted a full operational review, which led to cost savings of £2.3m, the closure of two warehouses and a reduction in staff numbers from 92 to 59.

However, in a report to creditors, Parker Andrews said: “This was not sufficient to turn the company’s business around and led to a devastating effect on the financial position of the company.”

It was then presented with a winding up petition by one of its creditors and so it entered into administration on 19 December last year, 28 years after it was established.

Karl King Transport is now moving into liquidation, but the administrator said there were a number of matters of interest that were being reviewed by solicitors in respect of the company’s dealings with the port.

The report added: “From these enquiries it became apparent that there are options available to the company in respect of making a recovery, although at this stage it is not possible to provide any further details of any such claims as the joint administrators wish to avoid prejudicing any future legal proceedings that may be commenced on behalf of the company.”

A dividend paid to unsecured creditors may be possible, it added, although this is dependent on the result achieved from any legal claims.

Felixstowe Port declined to comment.