New developments in the logistics sector: Insolvencies among customers and logistics service providers

The number of insolvencies among logistics service providers in Germany has risen by almost 20% since 2024 – a figure that exceeds 1,000 insolvencies per year for the first time since 2012. These are not only small freight forwarders, but also medium-sized companies with more than 50 employees and an established customer base.

Even more alarming is the trend among typical customers in the logistics industry: here, insolvencies among retail and manufacturing customers – i.e. those who commission logistics services – rose by well over 20%. Particularly affected are:

• Retailers (especially textiles, electronics, furniture): due to overcapacity, price pressure and declining demand for physical products.
• Producers of consumer goods with high energy costs and supply chain disruptions.
• E-commerce players with poor profitability who were dependent on subsidies and capital market financing – and are now unable to find further investors.

Two examples: In the first quarter of 2025, online furniture retailer *WohnLux* went bankrupt – a customer of three regional freight forwarders and a national express delivery service. The logistics partners had already experienced payment delays months before the bankruptcy. When insolvency proceedings were opened, the logistics contracts were terminated. Another example from 2024: Textile retailer Esprit filed for insolvency and subsequently closed all its stores. As a result, the logistics centre, which had only recently been put into operation, lost its raison d'être, was closed and the expensive logistics technology was sold off at scrap prices.

• Inflation, interest rates and cost pressure
  Interest rate hikes as a result of rising inflation have not only made loans more expensive, but also made it more difficult to finance inventories and transport capacities. Logistics companies that have financed their vehicle fleets or rented warehouses are under enormous cost pressure. Not to mention the sharp rise in energy and fuel prices. At the same time, margins in logistics are traditionally very low. And logistics companies cannot raise their prices in line with their importance and costs, as customers are also struggling with declining margins.
• Overcapacity in the market
  After the pandemic, many logistics service providers expanded – often financed by loans – in anticipation of rapid growth in e-commerce. In reality, however, demand has remained static or even declined, as consumers are tending to hold back on purchases in view of the overall economic situation. What remains, however, are high fixed costs and contracts without reasonable protection against fixed costs. The result: a market with too many providers, too few orders and fierce price competition. Margins are shrinking – and with them, solvency.
• Lack of risk management strategies
  Many logistics companies – especially medium-sized ones – do not have professional receivables management. They accept long payment terms of 90–120 days without specific credit checks and rely on "trust". The result: if a customer files for insolvency, the sometimes high outstanding amounts are not or insufficiently secured.

• Consolidation is inevitable
  Major players such as DHL, DSV / DB Schenker and Kuehne + Nagel, but also established medium-sized companies such as Fiege, are gaining market share – not only through economies of scale, but also through better risk management and greater market power. Small and medium-sized companies that do not digitise, diversify or take precautions against risk will be taken over or removed from the market.
• Securing receivables
  Legal liens (and thus securities) are already available in the logistics sector: the carrier's lien (Section 440 of the German Commercial Code (HGB)); the freight forwarder's lien (Section 464 HGB); and the warehouse keeper's lien (Section 475b HGB). However, these liens are often waived by customers ("market power") and, on the other hand, they are only worth as much as the existing goods still have value. After all, the goods subject to the lien are often only delivered under simple retention of title. The question of whether and when the right of ownership takes precedence over the security interest has not been conclusively clarified. It is also often overlooked that certain goods cannot be distributed by the logistics provider at all, e.g. due to a lack of authorisation for medicines or special spare parts. In this case, it is better to secure claims through insurance companies (e.g., Allianz Trade (formerly Euler Hermes), Coface). Although premiums have risen (from 0.3% to 0.8–1.5% of the claim amount), this is the lesser evil compared to a bad debt that threatens the existence of the business.
• Optimise contracts
  Unfortunately, the German Freight Forwarding Conditions (ADSp) offer only limited protection. It is therefore advisable to supplement the ADSp with individual agreements (e.g. guarantees, transfer of ownership by way of security, short payment terms, short billing intervals, partial advance payments for fixed costs). Agreeing on advance payment is a good idea for customers who are already at risk – even if advance payment is often not enforceable. In addition, contractual "early warning systems" can be agreed upon, in which payment terms and collateral depend on creditworthiness. Without collateral, in the event of insolvency, one will only participate in the quota (usually 5-15%). Payment is often only made at the end of the proceedings, years after the insolvency application. The insolvency of just one customer can therefore jeopardise performance for all other customers ("domino effect").
• Customer management
  In an ideal world, it would be desirable to create a risk profile for each new customer based on freely available databases before accepting an order. In real life, this will not always be possible. Nevertheless, at least a risk assessment system should be implemented in the company, which shows the payment behaviour of each customer (discount payers, payment within the agreed period, frequent reminders necessary, etc.). If a deterioration is apparent, appropriate measures must be taken. Contractual provisions must be dynamic and flexible in order to take account of changed circumstances.

A structural shake-up is taking place in the logistics industry. The industry is no longer growing through expansion, but through efficiency. Those who continue to work exclusively "on trust" will fail. Those who take risks seriously, professionalise themselves and think strategically will survive – and even emerge stronger from this phase.