Family-owned Hendrickson Truck Lines Inc. of Sacramento, California, recently filed for bankruptcy protection, citing a soft freight market, loss of two key customers and a bad truck leasing agreement.
In its filing with the U.S. District Court for the Eastern District of California, it listed assets and liabilities as being between $10 million and $50 million.
Robert Destfino, vice president of sales of Hendrickson, declined to comment about the company’s recent bankruptcy filing when contacted by FreightWaves.
The carrier, which operates in 10 western states, lists up to 49 creditors.
The carrier has about 90 trucks and 97 drivers, according to the Federal Motor Carrier Safety Administration SAFER website.
The company said its financial problems started in January with a sharp decline in overall freight tonnage. This, combined with excess truck capacity, resulted in a 21% rate drop compared with 2018, resulting in a $400,000 per month revenue drop, according to its petition.
Two of the carrier’s top customers, which accounted for nearly 50% of its business, switched to lower-cost providers, the company said.
Despite the economic downturn, Hendrickson said it needed to replace its aging fleet and entered a lease agreement for 89 trucks for around $133,000 per month with 19th Capital Group LLC of Indianapolis.
The petition states that shortly after entering the leasing deal, the carrier started experiencing unanticipated maintenance issues with 25 of the trucks.
“Many of the trucks were not road worthy and broke down right after they were put in service,” Hendrickson said in its petition.
Truck repairs, towing costs and lost revenue and downtime cost the company nearly $864,000, the carrier said, resulting in a severe cash flow problem that caused Hendrickson to fall behind on its monthly truck lease payment with 19th Capital Group.
The trucking company alleges it tried to work with the leasing company about the defective trucks, but that 19th Capital Group refuses to do so until Hendrickson makes good on its delinquent lease payment.
Hendrickson said it simply does not have the liquidity to make the payments, which could lead to the repossession of all 89 trucks, resulting in a “complete shutdown” of its business and possible liquidation of the company.
The carrier previously filed for Chapter 11 protection in June 2015 after the California Labor Commissioner’s office found that 17 of its truckers were misclassified as independent contractors when they were actually employee drivers. The drivers were awarded nearly $2 million.
Omar L.
Its more apparent that as time goes by many Trucking companies will start to show weakness in this volatile market of the trucking industry as we have seen within the past two years. Many companies have had it to well for some time now and the greed has reached levels of unethical financial behavior. Although I will agree to a certain extent that the market in a whole is at 100% capacity with respect to truck to load ratio with small areas of the spot market being within a level average. Deregulation in the early part of the 80`s began a flood of thousands of trucking companies to start and the existing ones to expand to levels monstrous size. This allowed the so called major players to get into training of new drivers and forcing them to commit for up to a year of driving for those companies for below minimum wage at times and it continues today. As fuel cost rises and rates continue to drop and equipment price increases many companies were not prepared in there asset allocation of those increased cost. The tidal wave will continue into 2020 and beyond and with all the political uncertainty and crisis around the globe many will suffer in the trucking industry. We have allowed our so called politicians to control every aspects of the industry we have grown to love and enjoy and yet many just sit on the side lines like sheep to the slaughter.
Mike
How about we end the ease of obtaining operating authority? Prove you are solvent, prove you have competent management and the ability to operate a company, etc… They give out authority like my mother gives out candy at Halloween. And put an end to the foreigners coming in and setting up shop, while running everything from Bosnia, Macedonia and Russia, India too. That would put a dent in things.
Noble1
A totalitarian approach is not the answer . People aren’t perfect and they are bound to make mistakes . The one’s whom you’re asking to solve our problems are far from being perfect and THEY themselves take advantage of the people as well .
Do you think governments are perfect and don’t mismanage ? Do you think they are “fair” and “honest ” ? Do you think they are ethical ? They themselves create laws to screw people into slavery . All these capital gain and income taxes etc we pay are a fraud ! Look into it . At one time they were created as temporary measures . What happened ? Why have they become the “norm” ???
You may want to go back to when the Federal Reserve obtained power . You may learn a thing or two on how and what controls government .
I certainly understand your frustration , however, until we have an ethical government in place that DOESN’T cater to Corporate desires and unethical measures , they may not be the answer you seek . Why should we make life more difficult for the ethical due to the unethical ?
It’s a little like penalizing truckers with speed limiters and ELD’s just because a certain few abused of their liberty . That’s not fair and it’s not “right” !
WE have speed “limits” and laws in place to penalize people once they get caught violating a speed limit law . We shouldn’t enforce speed limiters . Or if we are going to enforce such a thing then enforce speed limiters on all vehicles . Don’t discriminate !
This world as we know it is screwed and it’s due to a lack of ethics . That’s the problem . Now if we can instill ethics in people and show them how it could be even more profitable to act ethically than not , then we may be on a course to improve our current unethical problems .
It’s a little like prisons . A prison doesn’t solve a “problem” , it simply stops a person from recommitting a problem for awhile . And at an extreme , death penalties don’t prevent others from repeating the same act that condemned one to death .
The “stick” is not the answer otherwise the same “problems” wouldn’t be reoccurring . So we decided to “manipulate” people instead . That isn’t working any better . It certainly “pays” , but it doesn’t “solve the problem” , it actually causes another .
Ethics is the solution and the only solution . And that solution needs to be applied at the top to influence those at the bottom and all in between .
Until then , good luck with the totalitarian approach which will eventually certainly lead to a revolution .
In my humble opinion ………
Jose
We celadon is gone also but that’s frm the co CEO stealing n fraud. Why doesn’t that co go after the ones who stole n if trk co realize if ur in business then knw what ur doing n have a person to map it out or maybe they just cant meet the DOT guides for electronic logs n at about 6500 per unit it gets expensive. N as far as leasing if u signed before u cked out the equipment then that’s on the idiot that leased out the trks .
Anthony Peetz
English please. And grammar…atrocious.
Laughing it up
I worked for this crap hole company. Trucks/trailers not maintained, non-existent planning and dispatch, lies from every angle in corporate. GOOD RIDDANCE!
Now Celladon is out too. Another corporate back stabber.
And even Swift had to go hide under Knights apron.
Maybe, just maybe these corporate mental twits will get it in their head you can’t screw your people over and keep your job.
Martin Hitchcock
Transportation took a very radical turn for the worse when deregulation and subsequent removal of fair pricing of rates dissapeared. How many motor carriers and airlines have folded since?
Entities who pay for freight believe that 1970 rates are appropriate.
The current driver shortage is also a direct descendant of this. If the job paid what it should, younger generations would already be on board. Live on the road for $50k per year? Kids are smarter than that these days.
Anthony Peetz
The so called driver shortage is a myth. We currently have an overcapacity of 100,000 trucks in the industry. Do you also believe in Santa Claus and the Easter Bunny, lmao?
Stephen Webster
A number of good well run trucking companies in Canada are in trouble. They tried to treat their members fair. Rates are 17 percent below where they need to be plus many shippers and receivers Last year paid detention pay when E-LOGS came in. About 13 months ago the stopped or reduced detention pay while other jobs in Canada pay better causing excellent truck drivers to quit in large numbers this year. These new truck drivers had more accidents and lowered productivity. We were told E-LOGS ment higher rates. This is as bad 2008. The large trucking companies in Canada are known all over the world Ford cheating truck drivers.
Bear
Andddd..most of it true.
Noble1
Let’s just simplify the real issue that lead to their demise = Another case of “mismanagement” , period !
– They first blame a soft freight market .
– Then they blame the loss of two major clients due to competition .
– Then they blame Truck reliability issues .
– Then in 2015 it’s mentioned that THEY misclassified drivers as independents rather than as employees .
This is simply another case of bad management blaming everything else but themselves .
Therefore , in the end “time” caught up with them AND another one bites the dust , LOL !
Sorry to say , but from my perspective most “trucking” corps are run by a bunch of ignoramuses . And when you look into their operations you wonder how in the heck can these people remain afloat ??? Which leads to conclude that it’s just a question of time before they get caught with their pants down and go bust .
Just like in the markets , everyone appears to be a genius in an uptrend , though once the “trend” reverses , not so many “geniuses” remain .
Point and fact : If it were not the case we certainly wouldn’t be going through a bombardment of new regulations galore . Even the “regulators” are ignorant . And the one’s lobbying for “regulations” are …… well there are two groups . !One group are the clowns who want to have an advantage in the industry . And the other are unfortunate victims of abuse from the one’s who want an advantage in the industry and have take advantage of the loopholes in the industry .
Now the argument is all about “safety” . However , it’s being used manipulatively to gain a competitive advantage .
Back in the day , you didn’t have to pass all these so called training exams . And the one’s from old school were among the safest drivers out there . What happened since ? Too much sugar in food ? Have the public been dumbed down to such an extreme ? Where now they need to be taken by the hand to cross the street ? While technology evolves , the human race as a whole appears to be a bad case of devolution .
And who would gain by such a thing ? The “elite” aka 1% . They are so fearful of losing their position of power , that in order to sustain it they must dumb down the public , LOL ! How ? Through what you consume and are taught .
If you really want to get an idea of the general public’s mentality , take a ride during rush hour . Look at the way they drive . They drive as they think . Now that my dear friends is sad especially in this day and age . And a lot of those people are in politics , medicine , running corporations ,labourers ,engineers , teachers , PARENTS , and children , ect .
And these people can VOTE for the next President and or Prime Minister and are selected for “jury” duty . YEAH ! Ya gotta love “democracy” , LOL !
Read Propaganda by Edward Bernays and get ready to be sick to your stomach . You may realize how Trump etc became “President” .
This place , this world , has become boring . Reality is a disgrace . And if we as a human race don’t wake up , it’s just going to get worse .
In my humble opinion ……….
JustSomeGuy
What the fuck did I just read?
Scott Cook
A ” Manifesto “
EV3R
I haven’t stopped laughing and I’m into conspiracies!
Guy Fawkes
What exactly is tickling your fanny ignoramus ?