News / UK SME hauliers hit by rising costs going bankrupt every day

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Data released last week by accountancy firm Price Bailey revealed a record 463 haulage companies have gone bankrupt in the UK over the past year.  

The number of hauliers going to the wall has been increasing sharply since 2020, and the yearly rate of collapse has more than doubled since then – it means one or two haulage businesses are going under each day in the UK.

A study conducted by The Loadstar shows at least 90% of those that failed in the past month have been independently or family owned. And in the past three days, Companies House shows five have declared bankruptcy, all independently run.

Larger haulage insolvencies include Knights of Old, which had more than 750 employees, and Mark Stewart Ltd, which posted a loss of £200,000 and employed 25 people.

Price Bailey also looked at the credit risk score of the UK haulage sector. Some 33% of businesses in the sector are deemed at maximum risk, up from 22% 12 months ago, “considered at imminent risk of collapse”, it said, “and will find it almost impossible to access extra funding unless directors provide personal guarantees”.

The rising cost of fuel, energy and, well, everything, has meant that the cost of running a haulage company is higher than ever. And the rising cost of living and looming recession has meant consumers are reluctant to spend, meaning demand is limited and business becomes more competitive. 

Road Haulage Association (RHA) public affairs and policy director for England Declan Pang explained: “Hauliers operate on paper-thin margins, typically around 2%, so significant cost increases can put huge pressure on businesses. We’ve seen the cost of operating a truck increase by more than 10% this year, with reduced road freight volumes and less demand, as cost-of-living challenges continue.” 

One haulier took to social media to voice his concerns: “I’ve never seen volumes so low in the run-up to Christmas, which sees backloads and traction shifts being offered at 2018 rates and hauliers cutting rates to win business and remain busy – busy fools.” 

Matt Howard, head of the insolvency and recovery team at Price Bailey, added: “Business failures among hauliers are rising at a rate unheard of in more than a decade. We are seeing a perfect storm of high inflation and interest rates at a time when many haulage businesses are on life support.

“Aggressive interest rate hikes this year have really turned the screw. Many hauliers rely on debt finance to fund everything from fleet acquisition to day-to-day running costs, making them vulnerable to rising interest rates. Rising overheads as a proportion of turnover are pushing many haulage businesses into the red.” 

In an effort to combat this, the RHA has urged the government to offer more practical support for the haulage industry to slow cost hikes and boost the economy.  

“We’re calling for an emissions-linked rebate to help operators switch to low-carbon fuels such as hydrotreated vegetable oil and continuing the freeze on diesel fuel duty,” it said.

“We also want the Apprenticeship Levy reformed to help firms recruit and train new drivers and mechanics more cost effectively.”