The number of bankruptcies in the transport and logistics sector rose slightly last year. In 2017, the curtain fell on 9.3 out of every 1,000 companies; in 2018, the number was 10.5 companies. This increase is expected to continue this year as well.
This is what ABN Amro writes in a report on bankruptcies in the Netherlands. According to the bank, the downward trend in the number of bankruptcies in the Netherlands has come to an end. Consumer-driven sectors such as retail and leisure suffer from declining growth in private consumption and falling consumer confidence. For sectors dependent on exports, such as manufacturing, the declining growth of world trade has negative consequences. In this, increasing uncertainty, about the trade conflict between the United States and China and the brexit, plays an important role.
Slight increase in transport and logistics
In the transport and logistics sector, the number of bankruptcies increased slightly last year. Including sole traders, which include many self-employed persons, the bankruptcy rate remained roughly constant. Excluding these sole traders, the bankruptcy rate increased. In 2017, 9.3 in every 1,000 companies in the sector went bankrupt. In 2018, the bankruptcy rate rose to 10.5.
Number of bankruptcies per 1,000 companies. Source: ABN Amro
Wages rise faster than rates
ABN Amro attributes the increase to higher wage costs. Wage growth lagged behind economic growth until 2018. Since then, however, it has accelerated; in 2018, wages in the sector increased by 3.1 per cent. Temporary workers even received 5.9 per cent more wages. This increase was disproportionate to the rise in rates, ABN Amro argues. Rates for logistics service providers barely rose, partly due to limited market power vis-à-vis shippers. This put pressure on margins, which presumably led to more bankruptcies.
Increase in mergers and acquisitions
The number of mergers and acquisitions in the sector increased in 2018. Notable is the increase among large companies, with more than 250 employees. There, a record 15 mergers and acquisitions took place. The bank suspects that these companies are trying to become more competitive through economies of scale.
Forecast 2019: increase in bankruptcies
ABN Amro also foresees an increase in bankruptcies this year. Due to rising wages and a stagnation in economic growth, the number of bankruptcies will increase by 5 to 10 per cent, it is expected. Influenced by digitalisation, the costly investments it entails and pressure on margins, the number of mergers and acquisitions may increase.
