36.8% of transport & storage firms are out of cash, reveal shock government figures
Transport & storage firms’ cash reserves are the lowest of any industry sector, surprise ONS figures have revealed. 36.8% of companies say they have no cash reserves. Significantly fewer of their retail and manufacturing partners are out of reserve funds, says Parcelhero.
Shock figures from the Office for National Statistics released this month reveal that transport & storage sector firms (the category which includes logistics, parcels, haulage and warehousing employers) have a cash crisis. The sector has the lowest cash reserves of any industry, including their manufacturing and retail partners.
The ONS’ Business Insights and Conditions Survey dataset, Wave 123, reveals that, compared to any other sector, more transport & storage companies have no cash reserves, says the home delivery expert Parcelhero.
Parcelhero’s head of consumer research, David Jinks, a member of the Chartered Institute of Logistics and Transport, says: ‘Companies were asked: “How long do you expect your business’s cash reserves will last?” Of those who responded who are listed as currently trading, a whopping 36.8% of transport & storage firms say they have no cash reserves. That’s a shocking result. The position has become rapidly worse since the first time the question was asked in June 2020. At that time, of the transport & storage companies currently trading which responded, the number reporting that they had no cash reserves was too small to register in the survey.
‘The situation is even bleaker when we compare the transport & storage companies’ cash reserves with their partner firms in the manufacturing and retail sectors. Only 10.9% of manufacturing companies currently trading report they have no reserves. Similarly, just 16.4% of currently trading retail sector companies say they have no cash reserves.
‘In fact, construction is the only business sector to have anything approaching a similar number of companies with no cash reserves. 25.5% of construction firms reported that they are out of cash reserves. That’s still over 10% fewer than the transport & storage sector.
‘Believe it or not, looking deeper into the figures, there’s even worse news. A further 12.4% of transport & storage firms say they have less than a month of reserves left. In fact, only a meagre 12.9% report they have more than six months of cash reserves. Compare that to June 2020, when a robust 25.4% of transport & storage companies had more than six months of reserves.
‘Again, just how bad these figures are is revealed when we see that only 5.1% of manufacturing companies say they have less than a month of reserves and a healthy 29.8% say they have more than six months of cash.
‘Similarly, transport & storage companies’ retail partners are also in a far more robust position. Only 6.3% of retailers say they have less than a month of cash reserves and 27.7% have more than six months of cash reserves.
‘Perhaps the most telling figures are those of the sector with the healthiest cash reserves. The information & communication sector reported only 7.2% of currently trading companies have no reserves, just a further 1.8% have less than a month’s reserves and a staggering 46.5% of the sector have more than six months of cash reserves. That puts the cash issues facing the transport & storage sector into perspective.
‘One certainty is that it will be those transport & storage companies that are partnered with retailers with strong in-store and online sales that will ultimately triumph. Parcelhero’s influential report “2030: Death of the High Street” has been discussed in Parliament. It reveals that retailers must develop an omnichannel approach, embracing both online and physical store sales. Read the full report at: https://www.parcelhero.com/content/downloads/pdfs/high-street/deathofthehighstreetreport.pdf