Economy Is Getting Real Bad

Downturn in European logistics industry starts to bite
23/Dec/2008 by John Manners-Bell.

The European road freight and contract logistics sectors are increasingly feeling the effects of the economic downturn. In the past few weeks a succession of job losses have been revealed as logistics companies and their customers have cut back or gone bust.

Major Dutch road operator Vos Logistics, for example, is making 345 staff redundant − 145 in the Netherlands and 200 spread across Poland, France and Hungary. Temporary workers will also be affected and some trucks sold off due, according to a company statement, to a sharp decline in freight volumes since October. Some parts of the group have seen a fall of 30% in revenue.

In the UK, 350 workers employed by DHL Exel at furniture retailer MFI's distribution centre in Doncaster, England, have been made redundant. Although DHL is looking for an alternative customer for the site, that will be a challenging task in the present economic environment and there are fears that the warehouse will close completely in February 2009.

Meanwhile, European logistics provider Wincanton is to lay off up to 188 of its employees based at two UK sites, Rochdale and Swindon, Wiltshire, following the decision by Woolworths' administrators to close down that retailer's chain of stores. That is in addition to a reported 900 job losses which will take place when Wincanton's cool chain network is merged with that of rival Culina. Wincanton's depots at Gloucester and Trafford Park, both in England, will be shut.

In France, industry trade association FNTR has revealed that the number of transport companies going bankrupt has soared by 97% to 2,055 in the first eleven months of the year. The situation is even worse for those with more than 50 staff, where the company failure rate has soared by 278%.

In Germany, an on-going survey of logistics companies undertaken by consultancy SCI Verkher has revealed that 70% of operators have experienced a slowdown in volumes and revenues. Around half reported delays in projects and 30% have seen customers go bust. The consultancy commented that German operators had seen a strong first nine months of the year up to the end of September. From that time on the financial crisis had started to impact severely.

Note: I hope we could get some statistics from the Malaysian Authorities so that we could check how bad is the situation over here.