Phoenix Express fails
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• Parcels network Phoenix Express has gone into voluntary liquidation. The Manchester-based firm, which had 33 local hauliers as agents, blames cash flow problems. It ceased trading on 12 July: 60 drivers and office staff at its head office have lost their jobs.
The company ran its own transport fleet as well as a hub in the West Midlands which it charged members of its network to use. But the system "went sour" because some hauliers were not paying Phoenix or other members for delivering their customers' packages, says financial controller Norman Hill, who is staying on to wind up the firm.
Cash was not coming in quickly enough to satisfy the firm's bankers, although it still had a "tremendous amount of business on the books" and is owed up to 215,000 by one member, he says. Its turnover is £2.25m.
Phoenix set up the hub two years ago but reverted to a direct delivery system in June to try and cut costs. "We set up the system just when it was getting harder to get paid," says Hill. "We offered 60 days' credit, which brought us into difficulty. And in this business, if you don't pick up today, you'll go tomorrow." There is no chance of the firm launching again even if it receives the money it is owed, he adds.
Managing director Peter Crossthwaite, who founded Phoenix eight years ago, is "gutted" by the firm's failure says Hill. "He is signing-on unemployed and doesn't know what he'll do now."
The company had an informal relationship with its haulier agents. Although it gave them territories, it did not charge a joining fee and allowed them to set their own charges and run under their own names. Manor Transport of Droitwich severed its links with Phoenix in May: We didn't like the way the system was run. We had problems with parts of the country and nothing was being done," says the company's Dave Geary. "But we were one of the fortunate ones, because we put more parcels into the system than we took out."