Wave of bankruptcies in the eurozone: ECB warns - transport sector among the most at risk

The European Central Bank published an alarming report in May 2026 as part of its cyclical Financial Stability Review (Financial Stability Review). The document is titled "Rising bankruptcies, resilient loan books: unpacking euro area corporate credit risk" reveals a growing paradox in the European economy: corporate bankruptcies are rising significantly, yet the loan portfolios of eurozone banks remain surprisingly stable. For risk managers and business owners in the transportation and logistics sector, this report provides key warning signs that ignoring them could prove costly.

Normalization after the pandemic - the market verifies entities that survived artificially

To properly understand the current wave of bankruptcies, we need to go back to the COVID-19 pandemic. In 2020 and 2021, governments and financial institutions across Europe launched unprecedented support programs: loan moratoria, public guarantees, non-repayable grants, and subsidized loans. While these measures were necessary in the face of the sudden economic shutdown, they had a serious side effect: they artificially sustained many businesses that would not have survived the crisis under normal market conditions.

As the anti-COVID measures were phased out and financing conditions normalized with the ECB's interest rate hike cycle, the market began to engage in brutal selection. The increase in insolvencies observed today is largely due to catching up The ratio of new business registrations to bankruptcies, which rose sharply between 2020 and 2021, has been steadily declining since then—a sign that the market is absorbing postponed bankruptcy proceedings.

Worryingly, the ECB points out that this process is not uniform across the eurozone. In Germany—Europe's largest economy—analysts see not only cyclical increases in bankruptcies but also more persistent structural trends: newly established companies are creating fewer jobs than a decade ago, suggesting that the problem is not simply the economic cycle but a deeper, systemic weakening of economic activity.

The Transport Sector Under Particular Pressure – The Anatomy of a Threatened Margin

The ECB report leaves no doubt: although the average European company maintains interest coverage ratios (Interest Coverage Ratio — ICR) at a safe level, problems are concentrated in a clearly separated group of particularly sensitive entitiesAccording to the vitality indicators developed by the ECB (viability scores), around 6% of companies in the eurozone can be considered permanently unprofitable—so-called zombie companies. Another 6% teeter dangerously close to the solvency threshold, remaining vulnerable to any external shock: an increase in financing costs, a slowdown in demand, or a sudden spike in energy prices.

The transport and logistics industry is among the sectors most affected described trends. The causes are multidimensional:

• Rising operating costs — fuel prices, insurance costs, road tolls and wage inflation in trucking are systematically eroding margins, especially for small and medium-sized carriers.
• Demand fluctuations — the slowdown in European industry, including key transport customer industries (automotive, construction, retail), translates directly into a reduction in the volume of orders.
• The pressure of energy transformation — requirements regarding CO₂ emission standards, the need to invest in low-emission rolling stock and regulatory uncertainty generate additional financial burdens that smaller entities have a serious problem with.
• Structural debt — some transport companies are still repaying liabilities incurred under Covid programs, which, given higher interest rates, means rising debt servicing costs.

For freight forwarding companies, logistics companies and B2B service providers operating in supply chains, this means one thing: the risk of payment backlogs from industry partners has increased significantlyA contractor who currently pays invoices on time may be among the 6-12% of entities teetering on the brink of solvency—and just one quarter of poorer results is enough for the situation to change dramatically.

Why are banks stable even as bankruptcies rise? Shifting risk outside the banking system

The apparent contradiction between the rising wave of bankruptcies and the healthy state of bank portfolios becomes clearer when we look at the long-term change in the financing structure of European companies. Non-financial companies are increasingly less likely to use traditional bank loans. — instead, they use corporate bond issues, loans from non-bank institutions and private capital within private credit funds.

This transformation has profoundly paradoxical consequences. On the one hand, banks are now actually less exposed to losses related to corporate bankruptcies because they simply hold a smaller share of companies' total debt. On the other hand, this risk has not disappeared. It has only remained. moved to the private credit segment, where exposure primarily lies with pension funds, insurance companies, and wealthy individual investors. If the recession deepens or interest rates spike, it will be these entities that will suffer credit losses—not banks, which have previously issued warning signals about the condition of the corporate sector.

This mechanism is particularly important for transport and logistics companies whose portfolio includes clients financed by private credit funds or non-bank financial institutions. The lack of signals from the banking sector does not mean that the counterparty is solvent — can only mean that its debt is hidden in less transparent financing structures.

SMEs vs. Large Corporates - The Growing Credit Quality Gap

The ECB report also reveals significant discrepancies within the corporate sector itself, which have a direct impact on the assessment of partner risk in the transport industry.

Loans granted to large corporations remain characterized by very stable repayment rates. Large companies have access to diversified financing sources, a strong negotiating position with banks, and can more efficiently manage liquidity in more challenging conditions. This segment remains resilient.

The situation is completely different in the segment micro, small and medium-sized enterprisesNon-performing loan (NPL) ratios for SMEs have been rising significantly since 2023. While SMEs only account for around 27% of total corporate lending in the eurozone—meaning their deterioration does not impact banks' aggregate results—this is crucial information for business partners in the B2B sector.

A large portion of the transport fleet in Europe belongs to SMEs. A significant portion of customers for forwarding and logistics services are also companies in this segment. The increase in NPL ratios among SMEs directly translates into the risk of overdue payments and potential losses in receivables. with transport companies cooperating with this market segment.

It's also worth noting the geographic variation in the situation. Southern European countries that historically struggled with high NPL ratios (Italy, Greece, Portugal, Spain) are continuing their trend of reducing them—the result of years of reforms and proactive bad debt management. Meanwhile, in Germany and France, the percentage of restructured loans and loans classified in so-called Basket 2 (Stage 2 under IFRS 9) is rising—a category that signals a significant deterioration in credit quality, although not necessarily an immediate risk of impairment.

How do banks maintain stability? Proactively managing NPL portfolios.

The stability of bank portfolios is not just the result of a fortunate coincidence – there are specific management mechanisms behind this result, which are worth understanding when analyzing the market situation.

Firstly, European banks make intensive use of debt restructuring — Instead of waiting for a client to formally declare bankruptcy, they renegotiate repayment terms, which avoids having to declare a loan uncollectible. Second, they actively sell bad debt portfolios to specialized debt collection funds, shifting losses off their balance sheets. Third, they utilize securitization—transferring credit risk to external structures. Finally, the ECB, through its provisioning calendars, enforces systematic and timely loss recognition from banks, preventing the accumulation of hidden risk on their balance sheets.

All these mechanisms make Banking statistics may give a false sense of security entities assessing counterparty risk based on publicly available financial sector indicators. The actual scale of liquidity and solvency problems in the corporate sector is higher than would be suggested by synthetic indicators of bank health.

Practical implications for transport and logistics companies – what to do?

The conclusions of the ECB report should prompt risk managers in the transport and logistics industry to take concrete action. The stability of the banking system does not protect against payment bottlenecks in business-to-business relationships—these are two entirely different levels of risk.

1. Implementation of systematic analysis of contractors' solvency

Standard verification at the initial stage of establishing a relationship is not enough. Companies should regularly monitor the financial condition of key customers and suppliers using available analytical tools. Bankruptcy prediction models, such as Altman Z Score or its European adaptations, allow for the early identification of entities entering the high-risk zone. Company verification platforms such as EURODEBT can act as an early warning system in this process.

2. Diversification of the customer portfolio and reduction of receivables concentration

Excessive reliance on one or a few large clients—especially in the SME sector or industries hit hard by the slowdown—increases a company's vulnerability to individual credit events. Diversification, not only by sector but also by geographic location, helps mitigate concentration risk.

3. Verification of the contractor's financing structure

According to an ECB report, many companies today rely on non-bank financing—private credit funds, loans from private investors, and unsecured bond issues. This type of debt is less visible in standard databases. It's worth asking contractors about their financing structure and analyzing available financial statements for hidden leverage.

4. Revision of payment terms and credit policy

In the wedrodoGiven the growing number of bankruptcies, it's especially important that payment terms and trade credit limits are aligned with the current counterparty risk assessment—not just historical business relationships. Companies we've been working with for years may be in a completely different financial situation today than they were before the pandemic.

5. Trade receivables insurance

In an environment of increased credit risk at the corporate level, credit insurance becomes a risk management tool, not just an additional expense. Insurance companies, as entities that assume some of the risk transferred from the banking system, have extensive systems for assessing counterparty credit risk.

Macroeconomic Perspective – What's Next?

The ECB report doesn't forecast a sharp deterioration in the situation, but it clearly points to persistent areas of vulnerability. The key to further developments lies in several macroeconomic variables:

• ECB interest rate path — The easing of monetary policy, which began in 2024, is bringing gradual relief to companies with high debt levels. However, the full effects of lower interest rates will be delayed, and some companies may not survive to see this moment.
• Economic situation in European industry — especially in Germany, where persistent structural challenges (energy transition, competition from China in the electric car segment) may prolong the cycle of higher bankruptcies.
• Regulatory pressure in transport — The Euro 7 implementation schedule, requirements for zero-emission fleets by 2035 and rising compliance costs create an additional layer of financial pressure for transport companies.
• Expansion of private credit — the further growth of the role of non-bank corporate financing means that financial problems of companies will be increasingly difficult for external observers to detect early.

Summary – The risk is real, even if banks look healthy

The ECB report provides an important warning that is easy to miss if one only looks at headlines about the stability of the banking system. The number of bankruptcies in the eurozone is increasing, the transport sector is one of the most vulnerable, and the problems are concentrated among SMEs – the typical customers and subcontractors of logistics companies.

The fact that banks are performing well is largely due to structural changes in corporate financing and proactive portfolio management—not to the absence of real problems within the corporate sector. Risk hasn't disappeared, it's been shifted—and it can materialize precisely where transport companies feel it: in the form of unpaid invoices, customer restructurings, and sudden contractor bankruptcies.

In the wedrodoin the area described by the ECB — with 6% of permanently unprofitable companies and another 6% teetering on the brink of solvency — rigorous verification of business partners is no longer a luxury, but an operational necessityCompanies that invest in systematic counterparty credit risk management will be in a significantly better position when the next wave of normal market corrections hits their supply chains.