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NewsTrucking

Roadrunner downsizes dry van business, announces closures of five terminals, mass layoffs at five other locations

This story has been updated to include a statement by Shannon Everett, president of Rich Logistics, as well as a press release issued by Roadrunner, Rich’s parent company, late Monday, Sept. 30.

Approximately 450 truck drivers and employee positions will be eliminated after Roadrunner Transportation Systems Inc. (NYSE: RRTS)  notified workers on September 30 that the company is closing five terminals and significantly reducing its workforce at five locations.

The downsizing of Roadrunner’s dry van truckload business, Rich Logistics, headquartered in Little Rock, Arkansas, means it will reduce its number of drivers from 768 to 460 drivers, Shannon Everett, president of Rich Logistics, told FreightWaves late Monday.

“My thoughts and prayers go out to our employees and their families that have been impacted by this restructuring, a decision that we feel was necessary given the growing forces that are currently being exhibited throughout the NAFTA trade lanes,” Everett said.

Roadrunner, headquartered in Downers Grove, Illinois, is an asset-light company that posted around $2.2 billion in revenue in 2018. However, the company reported another big loss of nearly $142 million in the second quarter of 2019 that was far worse than the consensus estimate, which called for break-even results.

The downsizing includes reducing its “unprofitable” dry van company tractor and trailer fleets by more than 50 percent, according to a press release sent out by Roadrunner late Monday.

“In conjunction with the downsizing activities, the company expects to incur one-time pretax operations restructuring costs of between $12 million and $16 million, excluding the gain or loss on the sale of equipment and the write-down of assets,” the company said in its release.

In his letter to employees, Everett said the decision to reduce its dry van business was reached “after carefully assessing our operations and anticipated corporate needs.”

The termination date for notified employees is expected to be November 29, the letter stated. Employees subject to the workforce reduction will receive either severance or a 60-day notice, the company said.

Rich Logistics, which was acquired by RoadRunner for approximately $48 million in February 2014, will be permanently closing its terminals in: Kansas City and St. Louis, Missouri; Burton, Michigan; and Brownsville and Laredo, Texas.

The company will be significantly reducing its workforce at its Dallas, El Paso and Van Ormy, Texas, locations, and its sites in Little Rock, Arkansas, and Nashville, Tennessee.

The company said it is complying with the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires employers with more than 100 employees to provide their workers with a 60-day notice of a mass layoff.

“The downsizing activities are expected to reduce lease obligations and debt and be substantially complete by year-end 2019,” the Roadrunner release states.

The elimination of approximately 450 workers represents approximately 10 percent of the company’s total workforce, according to the release.

“We believe downsizing the dry van business will improve operating margins and cash flow, reduce lease obligations and debt, improve internal controls and allow greater focus on the significant value-creation opportunities within our other businesses,” Curt Stoelting, chief executive officer of Roadrunner, said in the release.

RoadRunner has been working to emerge from a financial scandal after three of its former executives were indicted by federal officials in an alleged accounting and securities fraud case that was discovered in May 2017.

Rich Logistics and its parent company, Roadrunner, were also hit with a $37 million lawsuit filed by Arkansas-based PKE Western Truck Leasing, Inc., alleging breach of contract on August 7. Everett said plans to downsize Rich Logistics’ dry van operation is “unrelated” to the PKE lawsuit.


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Clarissa Hawes

Clarissa has covered all aspects of the trucking industry for 13 years. She is an award-winning journalist known for her investigative and business reporting. Before joining FreightWaves, she wrote for Land Line Magazine and Trucks.com. Clarissa lives in the Kansas City area with her family. If you have a news tip or story idea, send her an email to chawes@freightwaves.com.

26 Comments

    1. Susan I am so sorry that happened. TransForce would like to help you find work as soon as possible, please feel free to give me a call at 866-808-1189 my name is Katie.

    2. I would suggest you call Ace Doran / Bennett Motor Express as they are expanding their Dry Van division significantly.

      Speak to Ray Hall in recruiting:
      (502) 449-9461
      Toll Free 877-223-3672

    3. Work had been kinda slow and some didn’t even work for more than 1 week but we were still employed having hopes that we would get up again and then we get the worse news.

    4. So sorry this happened to you so suddenly. Please email me at katyadoc16@gmail.com Happy to point you in the right direction. Great incentives and lots of work!!!! I represent a small fleet carrier based out of MI hauling dry van cargo. I also dispatch for West Motor Freight of PA (109 years strong). Thank you Susan!

  1. I’m reading stories like this almost daily, yet a certain individual keeps running around telling us that this is the greatest economy ever. Something’s not right.

    1. Nooo it’s the greedy employee bastards that are on strike at GM!! They are wanting more money just to assemble and install friggin lug nuts on cars and trucks!! MAGA2020!!!

  2. Susan, that is terrible news. If you are in the Dallas or Laredo area feel free to stop by and discuss opportunities we have for you at PAM Transport.

    Address: 2300 Time St, Irving, TX 75061 – Ask for Victor
    Address: 317 Weathers Dr, Laredo, TX 78045 – Ask for Brenda

    You can also call us anytime at 479-361-5425

  3. My friend is company driver and fed x just delivered his termination letter no nprior notice I’m owner operator with same company and been sitting at home for two weeks now I’m waiting for . x. NOT!

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