The transport sector has highest number of closed businesses

Business

The latest Government Business Insights report reveals the ongoing crisis enveloping transportation and storage businesses. The home delivery expert ParcelHero says the report acknowledges the problem for freight companies has been worsened by the increasing driver shortage.

The latest Office for National Statistics (ONS) Business Insights and Conditions Survey (BICS) reveals that the transportation and storage industry once again had the lowest percentage of businesses currently trading of any industry sector. Less than 82% of registered logistics businesses were currently trading in early August, down from 94% in early October 2020.

ParcelHero says the survey makes tough reading for delivery and transport businesses. ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: “The latest BICS survey results for the period 26 July to 8 August show 7.3% of participating transport and storage businesses have closed permanently, and 11.1% remain temporarily closed”.

Once again, logistics and storage sector businesses have performed worst in this survey. It’s highly concerning that logistics and delivery companies are still experiencing difficulties on this scale. Freight transport is the barometer of the economy. When UK manufacturers and retailers begin to struggle, transport and warehousing is the first sector to show an immediate decline.

To put these disastrous figures into context, we only need to compare them to two sectors we would imagine have been far more significantly impacted by the pandemic: arts, entertainment and recreation as well as accommodation and food services. In fact, the arts and recreation sector reported just 1.7% of all businesses have closed permanently and 6.6% are temporarily mothballed. 91.8% of all arts and recreation organisations are back open for business. As for accommodation and food services, 3% of businesses have closed forever and 3.9% have remained temporarily shut in the period leading up to 8 August. 93% of all accommodation and food services have now reopened their doors.

In previous months, the transport and warehousing sector’s poor performance in the survey was due to the double whammy of Brexit and the pandemic. However, the latest results spell out a new worry for logistics and storage companies. The ONS states: “The high percentage of paused and not permanently ceased traders is partly driven by the freight transport by road industry. This industry has been experiencing a shortage of lorry drivers.”

ParcelHero has been warning of an escalating driver shortage since last October, and this has now become a crisis that threatens to empty supermarket shelves and delay deliveries.

The reason for the driver shortage is not hard to find. The survey highlights the issues facing the industry when it comes to losing EU workers. Overall, 40% of all businesses reported a decrease in the number of EU workers at the end of the EU transition period. Of those, 17% reported that this change in EU workers has caused severe disruption and 42% reported that it has caused moderate disruption.

To add the final nail in the coffin for some international logistics and delivery companies, the survey also reveals that over 50% of businesses engaged in trading overseas have experienced increased challenges since Brexit took effect on 1 January. That number has remained largely unchanged throughout this year.

 

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Media contact

Rebecca Morpeth Spayne,
Editor, International Trade Magazine

Tel: +44 (0) 1622 823 922
Email: editor@intrademagazine.com

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