While there has been some positive news of late regarding the UK’s haulage sector, new government figures have shown that nearly a fifth of transport and storage companies have exhausted their cash reserves. This fact has caused some to worry that a repeat of the Christmas Eve City Link disaster of 2014 may be on the cards.
The figures presented by the government illustrate that almost 1 in 5 (19.2%) have said that they ran out of cash last month (October 2022), with a further 28.4% claiming that they have 3 months of cash reserves or less. Only the education sector showed worse figures, with more than 30% saying they had no cash at all to draw upon.
“Firms Must Not Be Permitted to Fail Before Christmas”
David Jinks, head of consumer research for ParcelHero, has warned that firms should not be allowed to go under in the run-up to Christmas, citing the City Link administration disaster from Christmas 2014 when more than 20,000 parcels went undelivered until well into January the following year. He had this to say on the subject:
“It’s a shock to discover just how significantly transport and storage sector companies have been impacted by the ongoing financial crisis. 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.”
He went on to claim that the haulage sector was faring as badly as it is because of its competitiveness and reluctance to pass on cost increases to the customer.
“In contrast, 29.6% of manufacturing businesses reported putting up their prices in September, and 38.3% of retailers increased their prices.”
The End to a Challenging Year for UK Haulage
Much has happened in the UK’s haulage sector during 2022, and while there’s cause for optimism in some areas, this news serves to highlight how fragile the situation is. With so many firms operating so close to the edge, it won’t take much to tip the balance and force these companies into insolvency over the coming months.
While it’s still at the planning stage, much work has been done in an effort to improve truckstop conditions and attract more people into the industry. Further to that, the ongoing government-funded HGV skills boot camps run by HGVC are helping to address the continually reducing number of available drivers. That said, there’s still a lot of work to do.
A Critical Time In the Lead-Up to Christmas
The lead-up to Christmas 2022 represents a critical time for the UK’s haulage sector, as it will once again be pushed to its limits by consumer demand. Here’s hoping that those haulage companies that running on zero cash reserves are able to make it through this challenging period and out the other side. It needs to happen for the good of the UK’s supply chain.
At HGVC, we will continue to offer industry-leading HGV licence acquisition programs via our network of training centres across the UK. Our expertise and scalability allow us to meet any size of need, from single-driver training to large-scale programs.
To find out more about us and how we do things, take a look around our website or to get in touch, simply call 0330 818 8888 or click on ‘contact us’ today.
