Reviewed: 15th May 2017
Recent figures from insolvency specialists, Begbies Traynor, show that UK transport and logistics companies are experiencing high levels of financial difficulty, along with other key supply chain sectors.
Their Red Flag Alert research highlights that, “levels of ‘Significant’ financial distress within key sectors in the UK supply chain have risen by 26% on average over the past year”.
Companies suffering the greatest impact are operating in Industrial Transport and Logistics, however. This sector has seen a 46% year-on-year increase in ‘significant’ financial difficulty according to the Q1 2017 figures.
The failure of large organisations at the head of supply chains can cause a ‘domino effect’ with potentially devastating results for companies positioned further down. These smaller firms may already be dealing with extremely challenging trading conditions over which they have little control, and the loss of a key customer often signals the end for their business.
So what are some of the circumstances faced by the transport and logistics sector?
The supply chain industry as a whole relies on lower paid employees, and these additional employment costs may be passed down to logistics and transport companies that are already operating under tight profit margins. This added strain on an already poor cash flow position could be enough to signal business failure, and for firms to enter insolvency.
If you are the director of a company operating in the transport and logistics sector, Real Business Rescue can help you decide on the best way forward. It is vital to seek this advice at the earliest sign of financial trouble, however, as it broadens your options and offers the best chance of business recovery. Real Business Rescue provide director advice online, over the phone, or in-person at one of our 75 UK offices or a place of your convenience.
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