Soaring logistics companies' failures point to looming Brexit-fuelled recession
14th June 2019
Soaring logistics companies' failures point to looming Brexit-fuelled recession, warns delivery expert.
Logistics companies are a key bellwether of the UK economy. The collapse of a number of major hauliers points to the increasing impact of Brexit and a potential economic downturn, warns ParcelHero.
The failure of a significant number of major logistics and delivery companies over the past year is an early warning of a possible recession, warns the international delivery expert ParcelHero.
It cautions the logistics industry is a bellwether for the economy, and that the abnormally high number of leading supply chain companies collapsing in the last twelve months point to a potentially significant dip coming in the UK economy.
ParcelHero's Head of Consumer Research, David Jinks MILT, says: ‘ The logistics and delivery industry is a key barometer of the nation’s economy. Over the past 12 months we have seen the collapse into administration or complete demise of industry stalwarts such as the Canute Group, Bedfords, Simon Widdowson and TAS Transport. It’s no coincidence that many of their customers are involved in areas of the supply chain impacted by Brexit uncertainty, such as manufacturing. The international haulage companies at the coalface of Brexit are already suffering from its impact. For instance, the car transport specialist Beamish Transport failed in March directly because of the impact of Brexit on Britain’s car manufacturing output.’
Reveals David: ‘Logistics companies fail very early in a recession as they work on tighter margins, fewer goods are being moved and their customers start to delay payments or seek company voluntary agreements (CVAs). Our latest Industry Study , Will Brexit resolution - whatever its shape - bring dividends or disaster? reveals most retailers and manufacturers actually weather the worst of a recession and often fail only as the economy begins to pick up and new investment is required. In contrast, haulage and delivery companies fail as we enter a downturn - as we are currently seeing.’
Continues David: ‘The list of failures and administrations goes on: Northern Ireland’s specialist steel haulier Donnolley Transport was forced into administration in September as the weight of Brexit began to hit Britain’s steel industry; that was an early pointer to the eventual fate of British Steel. Add to the mix the likes of Axis Fleet Management, Simpsons Logistics and Harris Transport and it’s a roll-call of fallen companies.’
Concludes David: ‘We are seeing the first rotten fruits of a potential Brexit-created recession; even as the Conservative leadership contest turns into a virility battle over who will be toughest on forcing through a no-deal Brexit in October. That would mean Customs chaos and new duties on British products. Surely the collapse of these bellwether companies means it’s now time for the Government to end fears over a hard Brexit rather than see which potential leader will push no-deal through with the most single-mindedness.’
See ParcelHero’s latest Brexit impact study at: https://www.parcelhero.com/blog/expert-shipping-advice/study-will-brexit-resolution-whatever-its-shape-bring-dividends-or-disaster