Haulier’s quick demise caused by Ukraine war

By Chris Tindall

It took just six months of loss making activity at East Yorkshire-based Sam Carmichael Logistics (SCL) for it to collapse into administration, which can be blamed in part on the Russian invasion of Ukraine.

The company, which had 21 employees and operated 18 HGVs out of its North Ferriby base, was incorporated in 2021 and became profitable in its first seven months of trade, its administrator claimed.

Interpath Advisory said the firm’s woes began when its two largest customers started facing financial difficulties. One of them, Carmichael International, was involved in importing Russian timber.

Both of these big customers were closely linked to SCL by virtue of having common shareholders and directors.

In addition, one of them held SCL’s O-licence and so when it also began to struggle it created cash flow problems for SCL.

Interpath said SCL was consistently profit making in the seven months to June 2022, generating EBITDA of £116,000. However, with the start of the Ukraine war in February 2022, the flow of Russian timber stopped overnight and Carmichael International’s subsequent insolvency hit SCL’s sales volumes.

It meant the Yorkshire haulier went into the red from July onwards, generating a loss before interest, tax and amortisation of £235,000 in the five months to November 2022.

“Unsecured trade creditors totalled £39,408 and related party creditors were £1m at the date of the joint administrators’ appointment,” said the report.

“We do not anticipate funds will be available to make a distribution to unsecured creditors.”

The Hazchem Network is raising awareness of the need to rely on ADR carriers for the transport of lithium ion batteries.

Lithium batteries are becoming much more common as they are increasingly being used to power vehicles, as well as being used in consumer electronics and solar equipment. But The Hazchem Network has warned that many customers are unaware that ADR hauliers are required to transport batteries with a power rating above 100Wh, due to the risk of them catching fire.

Hazchem MD Rob Symes said batteries below 100Wh may still require ADR and this must be checked with a dangerous goods safety adviser.