A Burton-on-Trent haulage firm that failed last month was crippled by a host of problems, including Brexit, Covid-19 and an expensive fraudulent incident involving a customer, according to its administrator.

Freight Management European (FME) had traded since 1998 and held an international licence authorising 40 HGVs, but in a report to creditors Currie Young quoted a statement from director Ian Summerfield, which explained that the haulier was beset by financial challenges in the last five years.

An unexpected termination of its lease in Hilton, Derbyshire due to house building led to a £60,000 relocation cost in order to preserve warehousing customers.

The report said: “There was also a significant financial loss of around £150,000 due to a fraudulent incident involving a waste customer.

“The fraud case eventually involved the British, German and Polish police, as well as environmental health.

“Freight Management bore the brunt of the costs, paying all suppliers involved.”

The report added that Brexit caused a notable impact on the firm’s finances because a significant portion of FME’s transport was tied to the continent.

Following the withdrawal of the UK from the EU, many customers changed their sourcing patterns and the haulier’s business volumes decreased.

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“Adjusting the transport operations to a domestic market was a costly process, as many of the vehicles and trailers were specific to the EU market,” explained Summerfield.

“The owned vehicles had to be sold at prices much lower than desired due to the entire market being depressed for these assets as a result of Brexit.”

The pandemic then hit its operations when demand for transport and warehousing plummeted and this was followed up by FME grappling with the HGV driver shortage, fuel crisis and a second uncertain eviction date from its warehouse and operational facilities.

“Unable to provide assurance to Bombardier, now Alstom, our main warehousing customer, about our tenure at the main facility, they decided to withdraw all their operations,” said Summerfield.

“This abrupt withdrawal of storage from all three facilities has left Freight Management grappling with substantial costs and commitments.”

The company entered administration on 8 August, but Currie Young said a pre-packaged sale to a connected party, Agile Supply Chain Management, for £72,000 was achieved 24 hours later.

“The initial sum of £6,000 was payable on completion to Currie Young’s client account and the balance payable on deferred terms,” said the administrator.

It is not thought there will be funds for unsecured creditors, due to the amount owed to the company’s secondary preferred creditor, HMRC.

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