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75% rise in number of transport and logistics company failures

The number of transport and logistics companies failing in the first quarter of 2022 is 75% more than the last year, according to the ONS.

It says that 15,005 freight transport businesses failed in the first quarter of 2022 (January to March), compared to 8,590 in the same period last year. The majority of failures are small couriers that started business at the peak of the lockdown boom in parcels.

ParcelHero’s head of consumer research, David Jinks, said that the increase was likely a result in the change of consumer habits post lockdown. “Lockdown restrictions forced people into sending their gifts rather than deliver them in person. At the same time, the closure of all non-essential stores created a boom in home deliveries. The market is now readjusting as friends and families reunite and shoppers flock back to the high street.”

“It’s significant that this new ONS Business Demography analysis identifies road and courier activities (unlicensed carriers) as the two main sectors responsible for the bulk of transport and storage industry closures. This supports our view that many of the courier start-ups that crested the wave of demand during the pandemic have now hit problems.”

“These closures are the flip-side of the significant growth in the sector in 2020 and 2021,” said Jinks. “In Q1 2020, 8,160 new delivery start-ups opened and, in the same period in 2021, 10,680. These were often smaller SMEs, employing an average of 2.1 people. Now the peak in demand has diminished, many of these new companies have struggled to maintain volumes.”

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