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Rough landing for airfreight hauliers
Page 8
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• by Mlles Brignall
Airfreight haulier ;;..on S.ntn Transport has ended a dreadful couple of weeks for the air freight sector by following two other companies into liquidation.
The company shut its doors for the last time on Monday (3 March) after telling 50 drivers and other staff they were no longer needed. A week earlier, 100-truck operator Farr Transport was forced to call in the liquidators—and it was preceded by DST, which did the same just a few days earlier, All three companies cited the terrible trading conditions that have followed September 11 and the resulting decline in the world's economy Airfreight volumes are a fraction of what they were preSeptember 11, and it appears that many companies in the sector have been living off previous earnings.
Ron Smith, which was in business for more than 30 years, operated out of three depots, including near Heathrow and East Midlands airports —Farr had four depots, all of which have closed.
There have been persistent rumours that Ron Smith Transport was in trouble for the last few weeks—rumours which were still being denied right up until last week. Its seems the
final blow was the loss of a £3.5m contract with transport giant Exel.
DST says it had to walk away from two Elm contracts after being asked to take a rate reduction of between 7-22%— on top of which, it had recently been hit by two bad debts totaling around £80,000.
A spokesman for Farr's liquidator Clarke Bell blamed the terr ble economic climate for Farr's demise.
The crisis in the airfreight sector does not bode well for the rest of the transport industry. Tracitionally, airfreight hauliers are among the first in the industry to suffer, when the economy slows down or goes into a recession, and the quickest to recover.
Volumes in this sector are closely allied to the state of the economy, and it is becoming obvious that the UK economy is struggling. Prior to the World Trade centre attack, airfreight was considered a very good business to be in. "It doesn't look good, and you have to think there will be a few more following these three into liquidation unless things pick up pretty sharpish," says an industry insider.
Martin Carroll of Saints Transport has had to make 20 drivers redundant since Christmas. However, his firm is picking up more work and is now recruiting again.
"We're in for a tough year. but we have to look forward— there will still be opportunities." says Carroll.