A major freight company based in the West Midlands has gone into administration threatening the jobs of more than 900 people.
Joint administrators from Ernst & Young were appointed by the directors of Netfold on Friday.
Netfold, which trades as Amtrak, specialises in national and international parcel freight. The business is headquartered in Aldridge and operates two distribution hubs in Aldridge and Warrington together with 36 distribution depots across the UK, employing over 900 people.
High costs and the continuing squeeze on consumer spending have been blamed for the collapse of the business. One of the joint administrators said: “Amtrak has found trading in the current economic climate challenging. It is a business led by consumer demand and as consumer spending power has weakened Amtrak’s business has suffered. We are currently assessing the financial situation of the business, and as a result the collection and delivery of goods may be disrupted.”
The company was launched in 1987 and chose the West Midlands as its base because of the region’s key location at the heart of the national transport network. It had built up a nationwide network of depots and had more than 1,000 delivery vehicles operated by staff and franchised drivers.
Extensive investment had been made in the Aldridge distribution centre including the use of new technology to sort and track parcels.
With the high cost of fuel and other current factors, the logistics industry is going through a tough time.
Pest control and hygiene services company Rentokil Initial gave an indication of this on Friday when its said its losses had been compounded by the poor performance of its City Link logistics operation.
The parcel business suffered a loss of £29 million loss in the first half, with delivery volumes down nine per cent in June compared with the same month last year.
Rentokil had warned of the difficulties faced by City Link late last year when it said that internet delivery orders were down in the run up to Christmas.
Amtrak acquired the assets of Nightspeed Services in August 2005 and the whole business was sold to Netfold early last year. The deal was said to represent a “landmark” for the company, bringing ownership back into the transport and logistics market for the first time since 1998.
Netfold was said to represent “one of the industry’s most experienced management teams with a solid background in the express parcels, freight and logistics business sectors”.
In April, as part of its ongoing investment strategy, Netfold had ordered 100 new Mercedes Sprinters vans.
The first 50 vehicles were due for delivery last month with the rest following in December. Amtrak had already invested in almost 100 long wheelbase Ford Transits for its fleet.
Managing director Alan Jones was quoted at the time as saying: “We will have one of the most modern fleets in the business, increasing efficiency, reliability and, importantly, helping us meet our commitment to reducing carbon emissions.”
Last year, Amtrak added 18 double-deck trailers to the six already in its fleet, to cut the number of trunking vehicles between its Aldridge hub and depots nationwide.
“Investment in IT systems, giving us full visibility throughout the network with real-time PODs, and some reorganisation of the depot network, have also helped us to run the most efficient operation possible.”