Transport and haulage insolvency risk falls sharply

Insolvency risk in the transport and haulage sector has fallen. Picture: Stephen Mansfield
Insolvency risk in the transport and haulage sector has fallen. Picture: Stephen Mansfield
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Scotland’s transport and haulage industry has seen the proportion of businesses at high risk of insolvency fall 10 per cent in the first half of 2016, according to new research.

The percentage of companies considered at higher than normal risk has fallen every month since January, decreasing 5.4 per cent in June alone, insolvency professionals’ trade body R3 said yesterday.

The organisation said 24 per cent of Scottish businesses in the transport and haulage sector were considered at high risk – compared to the UK average of 33.3 per cent.

The north-east of England and Northern Ireland were the only regions of the UK to have lower levels of insolvency risk in the UK.

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Tim Cooper, chair of R3 in Scotland and a partner at HBJ Gateley, in Edinburgh said: “We’ve seen a considerable decrease in financial instability in the transport and haulage sector in the first half of the year.

“Not only has the sector lowered its insolvency risk but it’s performing strongly compared to regional counterparts. While the steep fall in the price of oil has hit other industries in Scotland hard, transport and haulage may be the sector best placed to benefit from a considerable reduction in costs.

“Businesses in the sector tend to work to tight margins. While costs are down firms should try and use the opportunity to alleviate any debts or cash-flow issues.”

Cooper added that skills shortages could still “be an issue” for the sector, and that a shortage of drivers will increase costs, withhigher rates to employment agencies.

He said the recently announced delay to the opening of the Forth Road Bridge will also be “unwelcome news” to many in the industry due to the added time and expense to journeys.

The figures are from R3’s latest insolvency risk tracker. The tracker is compiled using Bureau van Dijk’s “Fame” database and measures the proportion of businesses across selected sectors that have a heightened risk of entering insolvency in the 12 months to come.