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Texas-based flatbed carrier with 260 trucks shuts down, citing insurance costs

Flatbed truckload operators have been unprofitable for most of 2019

Fleetwood Transportation Source: Company

Texas-based flatbed and oilfield truckload carrier Fleetwood Transportation hauled its last loads on Tuesday after deciding to shutter operations, citing insurance costs.

SaferWatch reports that the carrier had 252 trucks, 673 trailers and employed 240 drivers. The fleet, based in Diboll, Texas (100 mile north of Houston), primarily hauled building materials and oilfield equipment. The company had been operating for 63 years, having commenced operations in 1956.

The Lufkin Daily News first reported the news on Dec. 17, having received an email tip that the carrier planned to shutter. On the same day, the chairman of the board sent a letter to owner-operators of the carrier, citing the inability of the fleet to secure insurance as the primary reason for deciding to cease operations.

Carriers that have had questionable safety records are struggling to find insurance. Chad Eichelberger, founder of Reliance Partners, a leading provider of insurance services to the trucking industry, said carriers could see insurance rates double or triple in 2020 if they had any accidents with fatalities in the past year.


Eichelberger says a carrier being faulted as the cause isn’t a requirement for rates to jump if there was a fatality in an accident involving the carrier. “Insurance carriers know that if there is a fatality involving a truck, juries will be sympathetic towards the [non-trucking] injured party and may reward damages in the nuclear category regardless of fault.”

A small carrier with a clean history will pay $5,000-$7,000 in insurance per truck, according to Eichelberger. If a carrier is based in a high-risk jurisdiction, the rate could be 25-30% higher. He lists Louisiana, New York, New Jersey, Florida and California as the highest-risk states. He also suggests that rates in Georgia and Texas are increasing dramatically as payout levels accelerate.


The Truckload Carrier Association’s (TCA) TPP benchmark platform reports that truckload fleets are currently paying $6,800 per truck for insurance. The TPP data is the most reliable fleet costing data in the entire trucking market, providing performance and financial benchmarking of nearly 500 data points per month. TPP fleets feed their monthly operating and financial data into a benchmarking platform that allows them to compare costs between fleets.

In the past two years, the TPP fleets have seen 11% increases in their insurance premiums. According to Chris Henry, who runs the TPP platform on behalf of TCA, the reason the TPP fleets have not seen as dramatic an increase versus the rest of the market is their use of captives.

Captives are effectively insurance companies owned by the companies they insure. A captive lets a fleet self-insure or group insure up to $100,000 per claim. Anything above that is covered by an umbrella policy. The risk is pooled between other carriers in the group.

SaferWatch lists two separate accidents involving fatalities that Fleetwood Transportation was involved in within the past 24 months — both in 2018. 

According to transportation attorney Cassandra Gaines, two fatalities for a 260-truck carrier over two years would not be exceptionally high. In her view, other circumstances likely played a role in the carrier’s demise.

The company had two primary lines of business: hauling sand to oil fields and flatbed trucking. Both markets have been decimated in 2019.

Sand is used in oil field fracking operations to blast rocks in hydraulic drilling. Over the past decade, oil drillers hauled sand from hundreds of miles and paid top dollar to get the commodity moved. In the past two years, this business has changed. Oil drillers found local sources of sand and didn’t require it to be trucked from other places. There has also been a shift in investor sentiment toward exploratory oil drilling.

A number of large fleets that were involved in hauling fracking sand and oil field work have shuttered or downsized in 2019, including Stevens Tanker Division, Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB).

The other core part of their operations involved flatbed truckload services. Flatbed trucking has been struggling for most of 2019, after enjoying a red-hot market in 2018. According to TPP data, the average flatbed operator has been operating in the red all year. Operating ratios (OR), or a measurement of operating profitability, have hovered above 97 for most of 2019. For most truckload carriers, a carrier should generate below a 97 to generate a profit. For the flatbed industry, this happened only one month in 2019, June.

Source: TPP Operating Ratios for Flatbed (SONAR:OPRAT.FCF) 


The company was also a party to a class action lawsuit filed against the company in Lake Charles, Louisiana, because the company allegedly failed to pay overtime to drivers. The lawsuit claims that intrastate truck drivers were hired on a per-job or per-hour basis to haul wood chips from a lumber mill to a paper mill. The company did not pay overtime for drivers involved in the runs, even when their work exceeded a 40-hour work week.

To read the lawsuit, click here:
https://s29755.pcdn.co/wp-content/uploads/2019/12/Class-Action-Complaint.pdf


Class actions are extremely expensive to defend, even if the company ultimately prevails.

Regardless of the reason for Fleetwood’s decision to close the doors — whether insurance costs, the market or litigation related to the class action labor lawsuit — this case demonstrates the perilous position most trucking fleets have been in throughout 2019.

With new regulations coming and an increase in trucking-related nuclear lawsuits likely to plague the industry for years to come, trucking bankruptcies will remain a neverending story.

23 Comments

  1. Hart Levine

    While insurance costs range across the US, there are only a few progressive insurers looking to mitigate risks to their customers. When an element of distractions removed from the drivers on the road, the accident rate drops. When we introduce a rewards based system AND a solution to stop drivers from interacting with their phones while on the road, accident rates can go down further. Everyone wants to know what’s in it for them when introducing new safety measures. It’s not big brother watching you, it’s your company watching out for you!
    We are happy to help where insurance providers are open to a solution to keep businesses like this going and help be part of the solutions, not be a root cause of the problem, so to say.

  2. Yote Anders

    does anyone have an accurate count of how many trucks have been shut down this year? How many more companies have to go belly up before the industry is affected? They said Celedon would not even be a bump in the freight rates. so will it take 10,000? 50,000? 100,000? at what point does this stop?
    Yes, lets level the playing field – self insuring should be illegal. let the mega carriers go to the free market for insurance the same as the small carriers. perhaps then ATA will get the reality check they need.

    1. Bill

      I have asked MANY times what the difference is with self insured vs being under an insurance company.
      Are we seeing self insured companies not paying claims and awards?

  3. Michael

    Insurance rates have risen dramatically the last three years. I have been quoted rates that were double from three years ago. I met an owner who had new authority. He is paying $25,000 for one truck. The larger carriers have an advantage when they self insure. One major reason the large carriers and ATA pushed so hard for ELOGS was to have a level playing field. It put smaller carriers and independents at a great disadvantage. If we are going to have a level playing field then the big carriers should not be able to self insure. They should be required to buy insurance on the open market the same as a guy with a single truck. The smaller carriers have been paying the bulk of these unreasonable rate increases. When a big truck is involved in an accident the insurance company will usually settle a claim even if the trucker is not at fault. This should stop. The cost of paying these phoney claims is passed along to the industry. Out of control insurance costs are one reason so many carriers are shutting the doors. The rates are not there to absorb these huge rate increases.

  4. Daniel C Driver

    This is ridiculous. Hold the car drivers accountable, fatality or not. If the car driver is at fault, accuse them accurately. If the CMV operator is clearly at fault (usually not at fault), accuse them accurately. Don’t force the CMV operator, insurance, or owner pay for the car drivers’ mistakes or inaccuracies. It is rare, but sometimes the CMV operator is legitimately at fault.

  5. Robert Haley

    It’s a shame that closing doors because of rising insurance cost is a reality of today’s business environment. Insurance carriers are looking at CAB scores and safety first. If your not at or below national average then becomes a challenge to find favorable pricing.

  6. Noble1

    Quote :

    “Flatbed truckload operators have been unprofitable for most of 2019”

    Depends where ! Some are getting $4 a mile and paying drivers on PAYROLL .80 cents a mile !

    I personally have refused fladbed . I’ve been there , don’t like it . I like to drive, drop and hook ,and fly !

    To heck with the strapping and tarping business , especially in winter ! Rolltite(curtain) neither ! It’s ain’t worth the effort , especially in winter !

    I’ve done it , and calculation-wise , drop and hook yard to yard is the best . ZOOM ZOOM !

    If you think I’m going to position myself to “depend” on some dock worker and or their way of doing things , LOL , NOT !

    In & Out ! Paid by the mile , then roll baby , ROLL ! Cut out all that BS and ROLL ! ROLL at night ! While all them 4 wheelers and most truckers and scales are sleeping ! Enjoy it while you still can !

    In my humble opinion ………….

      1. Noble1

        Richard when you’re paid by the mile , you’re paid to “drive” !!! Those wheels need to “TURN” .

        Some will offer you a few cents extra for a drop and or pick up . They do the same for a switch . Normally on a drop & hook it’s a fixed rate . So you’ll need to calculate your time well and cut out any hold backs . You want to eliminate any potential delays within your control .

        Then divide the amount paid by the time it took you for your run , minus your “breaks(off duty)”, but include your truck & trailer(s)”inspections” . That’s your “hourly” wage . Same run every single day . That should give you an idea of what you’ll average every week aside from out of control issues that may occur , such as bad weather . You also want to sleep in the yard guaranteeing you have parking .

        If you pay me well for labour , I’ll do it if that’s what I like to do . But you’ll never get paid fair value for your labour in trucking , nor time wasted . So you have to cut all that BS out .

        You need to replace your “lazy” perception with being “savvy” !

        Today with all the risks involved with collisions and being sued , you want the least amount of vehicles on your route . That way you’re mitigating risks and time constraints .

        I don’t have 45 minutes + , to dedicate to a scale . I don’t need to be micromanaged nor held by the hand . I need to be efficient . Every minute counts when you’re paid by the mile and or a fixed rate .

        Early this year during a blitz I was held up at a scale for 45 minutes !!! I was clean like a whistle ! I always am cause that’s the way I choose to run . The clown at the scale held me up to justify his job . He even erred in his verifications , then apologized after I corrected him . I don’t need that sort of BS !

        My objective is to be profitable for two parties , for my employer AND myself . I never had an employer complain . I’m the one that complains if they change their story . I have a zero tolerance rate for BS . This is a temporary thing for me , otherwise I would have concentrated on getting my own truck and being independent with my preferred choice of a run .

        This is business . I have a right to choose what I like and willing to do . So I chose and choose to do what is most profitable as a driver in this trade on the routes I like and can control to a certain point .

        Rolling at night I have no worries about finding a parking spot at a truck stop to sleep cause I’m rolling . I have this calculated down to perfection on my preferred routes . I always stop at the same places at the same time for my breaks ,shower, & fuel . My employer simply needs to look at the time and knows where I am . They don’t need to check a GPS . If the weather(out of my control) is bad then I’m flexible due to remaining safe .

        I’ve been around the block . I know what works and not . Some have suggested that I should get into dispatching cause I’m good with routes , timing, drivers, and customers . I don’t want to deal with customers . I want to drive and roll and then get out of this slave business !

        My last employer was a clown . But , before leaving him I set him up in flatbed because the rate I found him was extremely good . I placed his 5 trucks with a carrier . I told him this should be temporary and he should deal direct with a or plural customers and cut out the middle man and reap more income . I had offered to trade fuel contracts(but not limited to those) for him to reduce his fuel costs .He agreed , but I got fed up of him . He lacked integrity , wasn’t quick in the mind etc . .

        I chose to get into trucking for a few reasons . Number 1 – It’s a market barometer – the canary in the coal mine. Number 2- I wanted to see if a trucker could be one step ahead of Wall Street due to seeing tightening and loosing in demand at the bottom .

        I proved it to my prior employer by integrating the chart on a retailer he was hauling for and what was occurring in their yard . I told him in 2018 I believed the trucking industry was about to peak and that I believed the spot market(load boards) were going to dry up and rates were going to take a dive etc . He laughed in my face . I had strongly recommended that he remove himself from hauling for that particular retailer and from the spot market and to either go to a large carrier and or directly to a client . He chose not to .

        So I quit and I went to haul drop & hook for another carrier who was hauling for another retailer which I felt was going to increase in business .

        The retailer my prior employer was hauling for dropped in market cap by 27.5% and demand curtailed . The other retailer , believe it or not increased in market cap by exactly 27.5% and business/demand increased . The prior retailer’s yard was becoming saturated with trailers galore . Demand was curtailing as the chart indicated the stock was highly likely to enter a correction and take a dive while the retailer was reporting high earnings .

        It didn’t work out between the new employer and I so I went back to the prior employer because he kept on calling me . That’s when I placed him in flatbed due to his near bankruptcy state .

        This trucking business can either be a hell on earth or a paradise . It’s what YOU make of it .

        If I liked physical labour I wouldn’t be in trucking , I’d be in a construction union job getting fair value for my work within a “trade”, perhaps electrician . Then go my own way cause I don’t need a “boss” .

        I screwed up in trading a little while ago .Trucking is temporary to get back in my game . I never expected it to be the can of worms it is though . So it’s taking a while longer than I anticipated due to employer lack of integrity .

        Am I a trader/speculator because I’m lazy ? LOL ! I chose to learn about and play the markets because it’s a mind game and where the big money is . I’m a speculator . I like it . I couldn’t careless about the particular direction an entity takes . I play the moves largely based on technical analysis and cycles . I ANALYSE ! I “think” , I mitigate risk . I use leverage ! I want the maximum return for my effort .

        Understand ?

        Here’s a little tip for you : The more you use your mind , the less “muscle” you’ll need to apply .

        1. Noble1

          I omitted mentioning .

          I had asked the drivers first if they would mind doing flatbed . They didn’t mind due to the rate being higher . I also negotiated a weather bonus for them with the employer . That was the deal . I find him runs and place his trucks and he needs to be willing to compensate his drivers fairly .

          So his drivers get a bonus on any day it rains throughout the year , and all through the winter season due to the cold ,rain , and snow . They told me never has this ever been offered to them . Well , I’m a driver and I know what it’s worth and how demanding it is .

          I first would test the run , evaluate it and perfect it , then hand it over . That way he could have hired a newbie out of trucking school and the newbie wouldn’t break his head , they just had to be willing to do that sort of work .

          Even though it was flatbed , the runs were always at the same clients .

          Trucking needs to be coordinated to perfection allowing a little leeway for the odd occasion of an out of control event .

          I’m far from perfect , but I strive to be in what I do . He would tell me himself that I was the odd ball , never had he met a driver among the many he would go through that calculated to the slightest detail as I did . In fact he would tell me not to say to much to the drivers , LOL . You see how he was . He would take advantage of driver ignorance .

          When I would fuel , I would divide my average rate per mile per hour and obligate him to pay for fueling time and inspections . All my on duty time was paid according to my average hourly miles . I was profitable for him though .

          He was one of the types of mentality that believed truck drivers were a dime a dozen . I showed him different when one had cost him over $8k in transmission damages , smoking in a non smoking hotel room and his company fined , LOL !

          Anyways , there’s money to be made out there . Employers simply need to innovate, be efficient , calculate well , and be picky in the runs they choose . Most don’t give a damn , they take whatever comes their way and the poor driver has to break his/her head and put up with all the inefficiencies in the run which cheats them out of earnings .

          That being said , truck drivers need to be picky . They need to calculate everything just as OO’s do , and if the employer etc lacks integrity , walk away . Teach foreign drivers ! Talk to them . Most are being taken advantage of as well . You wouldn’t believe some of the stories out there . Tell them(employed truck drivers) about organized labour unions etc. Educate them . If you want rates to increase , explain to them that they are worth more and how to obtain it .

          Anyways , It’s you the driver who has the last word , not the “employer” . The employer simply needs to keep their word and be ethical. That’s what seems to be the major issue these days .

          In my humble opinion ……..

          Best of luck !

Comments are closed.

Craig Fuller, CEO at FreightWaves

Craig Fuller is CEO and Founder of FreightWaves, the only freight-focused organization that delivers a complete and comprehensive view of the freight and logistics market. FreightWaves’ news, content, market data, insights, analytics, innovative engagement and risk management tools are unprecedented and unmatched in the industry. Prior to founding FreightWaves, Fuller was the founder and CEO of TransCard, a fleet payment processor that was sold to US Bank. He also is a trucking industry veteran, having founded and managed the Xpress Direct division of US Xpress Enterprises, the largest provider of on-demand trucking services in North America.