Half of all haulage companies that were set up since 2019 have now entered insolvency proceedings or closed down, according to analysis of official figures.
They showed that 49.2% of new road freight companies have closed, with approximately 62,234 out of 125,801 firms having ceased trading.
The department for business and trade said 494 hauliers entered insolvency in 2023 and it estimated 33% of businesses in the sector are deemed maximum risk, up from 22% the year before.
This year has seen some major businesses in the sector struggling financially, with Bridgetime Transport entering administration, as well as Youngs Transportation, AAD Transport, Gwynedd Shipping, S&J European Haulage, Linkline Transport and Cartwright Bros.
The latest analysis of data from Companies House, carried out by Breakwells Transport, also showed that companies handling the transport of cargo are the most difficult to run, with a business mortality rate of 54.4%.
More successful are businesses that operate warehousing and storage facilities for haulage work, which have a mortality rate of 42.4%.
Julie Breakwell, director of Breakwells Transport, said: “Our research indicates significant challenges for the road freight industry, with almost half of all new road freight companies having closed.
“High costs, fierce competition, and fluctuating fuel prices can make it particularly challenging for new firms to stay afloat and make it past the five-year mark.
“For aspiring entrepreneurs, it’s important to carry out market analysis. That way, you can establish realistic financial projections and prepare for potential risks.”
Last week, transport lawyers warned directors who were struggling with mounting debts should not rely on ‘corporate rescue’ schemes after the Insolvency Service shut down businesses that preyed on firms in financial distress.
