One in five transport firms have 'run out of cash', new government data reveals

Almost a fifth of transport and storage businesses have no cash reserves left, raising concerns there could be another repeat of the City Link disaster on Christmas Eve 2014.

Government figures showed that 19.2% of transport companies – almost one in five – admitted they had run out of cash last month, with 28.4% stating they had three months or less left.

Only the education sector fared worse, with just over 30% saying they had no cash to draw on.

ParcelHero said courier and logistics firms must not be allowed to fail before Christmas, or the chaos faced in the wake of City Link’s administration eight years ago, when 20,000 parcels still remained in its network in January 2015.

“It’s a shock to discover just how significantly transport and storage sector companies have been impacted by the ongoing financial crisis,” said David Jinks, ParcelHero head of consumer research.

“At such a volatile time, it’s extremely dangerous for companies to have no cash reserves to fall back on to meet short-term or emergency funding needs.”

ParcelHero said the reason the sector was faring so badly was down to its competitiveness and a reluctance to pass on cost increases.

“In contrast, 29.6% of manufacturing businesses reported putting up their prices in September and 38.3% of retailers increased their prices,” said Jinks.

“Even 14.9% of companies in the education sector, facing an even more problematic cash flow than transport businesses, raised their prices.”