The nightmare before Christmas? How much of a struggle is it to run a courier business?

Everyone knows times are tough at the moment, and as we move towards Christmas and the winter in general, we all seem to notice and feel the expense more. The truth is that whilst many of us are struggling personally, the same applies to businesses also. Many businesses have faced hikes in costs and rates, and this has led some to take difficult decisions and introspection around whether it is realistically possible to continue trading. Whilst the festive season is often busy for many delivery and same day courier companies, the whole industry is not immune from this struggling theme. Our latest blog post will focus on a report which shows just how much the courier industry is struggling in general, and what could happen as the weeks go on.

We open this article with a recent report which looks at some alarming news as far as this topic is concerned. It has been found that around 20% of transportation and delivery businesses have little to no cash reserve left. This has been made worse by the crash of the pound recently, and the political fallout from economic choices. The title of the blog has a nightmare before Christmas in it, and you may be wondering what this alludes to. The report has also gone on to find that because of the lack of funds that exist currently, there is a real risk and big danger that many couriers businesses could collapse before Christmas, right at the time when demand will be at a peak. It doesn’t take much to work out the major implications this could have for people who do online shopping for gifts and presents. The bigger worry is perhaps the impact this could have on the economy aswell, as anymore spooks or shocks are unlikely to be tolerated or absorbed well.

To highlight how much of a problem this could be, the report goes back to the Christmas of 2014, and explains how a large courier and delivery company went bust on Christmas Eve, meaning over 1 million presents became stranded, not to mention all the hassle and problems this created. What’s more, the impact isn’t just on consumers and their presents or gifts either. Every delivery driver is housed in safe employment with a regular wage. This report and its implications create intolerable uncertainty for many people regarding their employment and jobs, just at a time of year when wages are needed the most.

The further statistics from this report also paint a worrying picture with regards to the few months ahead. In addition to those 20% with no cash reserves left, a further 20% of those in the study stated that they were down to the last 3 months of cash reserves – indicating this might be a problem throughout the winter months. The issue is thought to be in common with what many businesses face at the moment – increase in costs, which are difficult to pass onto the customer. The report found that courier and delivery businesses faced a hike in costs of 40% by September 2022, but only 9% had passed these costs on. The only way to make up the shortfall is the cash reserves, and thus you begin to see how big the problem is.

Whilst there is no doubt that many courier businesses will be looking forward to a busy few weeks ahead where they can make extra revenue, it would seem that it is definitely not on the basis of ‘becoming rich’ and might just be a temporary lifeline to carry some businesses through into 2023.

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