Economic headwinds blew Cross Transport off course

Cross Transport failed due to the Covid pandemic and rising costs, according to documents recently released by its administrator.

The Birmingham haulier, which provided road transport services across the UK and Ireland, brought in financial experts on 5 June after being hit by a series of economic headwinds. The company was formed in 2010 and had a depot in Swadlincote and an operating licence for 20 HGVs.

An administrator’s report into the haulier’s financial struggles quoted Cross Transport company director Dean Cross, who explained that the business was funded through an invoice financing agreement and that it had “grown fast due to a contract with Amazon.”

Cross said the work with the etail giant constituted 90% of its turnover. He added that when the business began to struggle the haulier entered into a moratorium and a company voluntary arrangement was proposed, but eventually the firm entered administration, with SFP taking control of its affairs.

In its report, SFP said the initial strategy was to try and sell the business and its assets, but given the lack of available funding it became apparent it was not viable to continue to trade the business. SFP added that it was unlikely there would be funds available for preferential and non-preferential creditors.

Shortly after it entered insolvency proceedings, administrator David Kemp said many haulage firms had struggled during 2022, blaming rising fuel prices and the professional driver shortage:

“With many companies in the industry operating under the pressure of thin margins, we urge directors to seek professional guidance at the earliest sign of trouble,” he said. “It would increase the chances of saving the business and securing the best result for the company and its employees.”

The post Economic headwinds blew Cross Transport off course appeared first on Motor Transport.

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