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'Companies will fail' as Northern Ireland leaves lockdown, warns freight boss

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Seamus Leheny

Seamus Leheny

Seamus Leheny

Northern Ireland will see a number of its freight companies go bust as the country exits lockdown, it has been warned.

The Freight Transport Association's (FTA) Seamus Leheny said that businesses would come under pressure as life returns to normal.

Mr Leheny said that while measures introduced to help companies like the furlough scheme were welcome, companies still had a number of issues to contend with.

The FTA represents the road, rail, sea and air industries as well as retailers and manufacturers.

Mr Leheny told Stormont's Infrastructure Committee on Wednesday that while many businesses had gotten through the "crisis period" they were now concerned about "survival in the long run".

"People are asking why have there been no casualties in the haulage sector and it's because of a couple of things. The furlough scheme has been a lifesaver for a lot of businesses. I know many operators here have up to 75% of their drivers on furlough, others on half," he said.

Mr Leheny called for the UK Government's furlough scheme to be more flexible to allow a gradual return to work.

"The workloads at the moment are inconsistent," he said.

The FTA rep said that many businesses could use drivers a few days a week, but while on furlough they are not allowed to do any work at all.

"We've made the call to Government, we need a flexible furlough scheme, it could be across other sectors as well, but I know for logistics it would just give those businesses where they are striving to get back to their full capacity they're not going to get there for months to come," he said.

"It means we could gradually wean people off the furlough scheme and the reliance on it."

Mr Leheny pointed out that while many companies had received payment holidays on their vehicles they would have to pay increased costs when businesses return to make up for the payments missed.

He said this would lead to companies having increased costs with a looming recession and less income.

"The financial issues will come to the fore in future, probably in the early Autumn time," Mr Leheny said.

"Companies will fail."

Mr Leheny said that companies would have to recover quickly if they wanted to survive.

He suggest insolvency regulations could be changed to allow "good operators" to start new businesses if their previous one went bust due to the fallout of the Covid-19 pandemic.

"These things have to be taken into consideration, if I'm a good operator, there was no issues with finances or compliance pre-Covid I think the department really has to consider a quick turnaround in these applications so people can lift themselves off the ground," Mr Leheny said.

"The big obstacle for us is coming out of this Covid and how we get through that and the ultimate financial pressures from a recession."

Belfast Telegraph