Container giant falls to recession
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• The haulage slump has claimed another victim with the collapse of Brain Haulage, one of the UK's largest container hauliers.
The Essex-based operation has ceased trading and is in receivership with debts of more than g5m.
There will be a knock-on effect with smaller container hauliers employed by the corn pany owed many thousands of pounds.
Of the company's 359 staff, 282 have been made redundant. The remaining 77, including container storage and repair workers and office personnel, have been kept on while receivers try to find new owners for the business.
However Brain Haulage's container storage and repair arm, Brain Services, is still in business. It accounted for about 20% of the company's g17m turnover last year.
The company operates from depots at Dagenham, Grays, Felixstowe, Wakefield, Manchester, Birmingham and Southampton. It is 70% owned by director John Brain, with the remainder owned by venture capital company Moracrest.
The collapse is blamed on accumulated trading losses and mounting debts caused by the recession. Receiver Howard Evans from KPMG Peat Marwick says Brain Haulage's margins were under "extreme pressure". Its customers included Tiphook, MISC and Maersk Line.
Evans says: "This group was squeezed between very, very tight margins and an excess of debt. The combination was fatal. Most container companies have been cutting their rates; there is chronic overcapacity. It's quite clear from the company's trading results that rates have been falling?
The company's bank, National Westminster, had tried to bring it out of "intensive care" for many months, but last week the directors invited the bank to appoint receivers. A new managing director, Russell Winmill, was appointed eight months ago.
The receiver has already been contacted by a number of companies which are interested in buying all or part of the operation as a going concern. Brain services is storing or repairing up to 3,000 containers at seven sites. National Westminster is owed the most money, but London-based Baltic Leasing financed many of the company's 200 trucks.
Brain used many subcontractors, and Evans says: "Those are the guys who will suffer most...even if things go well they won't be paid for at least four to five months."
At its peak in the seventies Brain ran 400 trucks. A year ago it was operating 260, with nearly 500 trailers and 450 staff. It had planned to expand into contract distribution and possibly into contract hire.
The UK importers and exporters organisation, the British Shippers' Council, is awaiting a reply from the EC Commission following its complaint that shipping lines are forming pricing cartels.
The BSC alleges that the shipping lines are forcing down road haulage rates and overcharging importers.