• ITVI.USA
    15,530.580
    61.700
    0.4%
  • OTRI.USA
    24.320
    -0.110
    -0.5%
  • OTVI.USA
    15,484.110
    63.600
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  • TLT.USA
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  • TSTOPVRPM.ATLPHL
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  • TSTOPVRPM.CHIATL
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  • TSTOPVRPM.DALLAX
    1.370
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    -5.5%
  • TSTOPVRPM.LAXDAL
    2.950
    0.040
    1.4%
  • TSTOPVRPM.PHLCHI
    1.690
    -0.010
    -0.6%
  • TSTOPVRPM.LAXSEA
    3.130
    0.110
    3.6%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,530.580
    61.700
    0.4%
  • OTRI.USA
    24.320
    -0.110
    -0.5%
  • OTVI.USA
    15,484.110
    63.600
    0.4%
  • TLT.USA
    2.700
    -0.010
    -0.4%
  • TSTOPVRPM.ATLPHL
    2.500
    -0.050
    -2%
  • TSTOPVRPM.CHIATL
    3.080
    0.050
    1.7%
  • TSTOPVRPM.DALLAX
    1.370
    -0.080
    -5.5%
  • TSTOPVRPM.LAXDAL
    2.950
    0.040
    1.4%
  • TSTOPVRPM.PHLCHI
    1.690
    -0.010
    -0.6%
  • TSTOPVRPM.LAXSEA
    3.130
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  • WAIT.USA
    120.000
    0.000
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NewsTrucking

Trucking companies blame rocky economic conditions for 2019 shutdowns

Hundreds of motor carriers, both large and small, fell victim to this year’s freight recession after some say they added more trucks and drivers to keep up with shippers’ capacity demands in 2018.

After last year’s red-hot freight market and record profits, many trucking companies blame rocky economic conditions, a weak freight market and soaring insurance and equipment costs as the main reasons some fleets did not survive the economic downturn in 2019.

Hundreds of motor carriers, both large and small, fell victim to this year’s freight recession after adding more trucks and drivers to keep up with shippers’ capacity demands in 2018.

Some carriers relied on the spot market for freight, which tanked in 2019, causing some owner-operators to shutter operations and go to work as company drivers until economic conditions improved. 

Celadon Group Inc.

The abrupt closure and bankruptcy filing of Celadon Group Inc. was by far the largest trucking failure of the year.

While it was no secret that Celadon Group Inc. was struggling to recover from a financial scandal that rocked the carrier after former executives were indicted in an alleged securities and accounting fraud scheme in 2017, few expected the carrier to file for Chapter 11 bankruptcy protection in early December.

Former drivers were stranded thousands of miles from home when their fuel cards were deactivated and there was little communication among company executives and employees about what to do with their trucks and loads just days prior to the company’s Dec. 9 bankruptcy filing.

Celadon and its subsidiaries had more than 2,500 drivers and nearly 1,300 office employees at the time it ceased operations.

“Thousands of people didn’t get a severance package and that adds an extra sting,” Ernesto Gonzales, a former corporate recruiter for Celadon, told FreightWaves. “The actions of a selfish few screwed over thousands.” 

NEMF

The trucking industry was stunned when unionized less-than-truckload (LTL) carrier New England Motor Freight Inc. (NEMF) filed for bankruptcy protection and announced it would wind down operations in February. 

The Elizabeth, New Jersey-based carrier, which had 1,385 drivers and operated 1,446 power units, cited a combination of high labor costs and tough competition, mostly from nonunion carriers, as reasons for the fleet’s collapse.

Falcon Transport

Another surprising shutdown this year was the fall of Falcon Transport of Youngstown, Ohio, that stranded hundreds of drivers out on the road with deactivated fuel cards after they received emails that the carrier was ceasing operations immediately.

Former Falcon Transport executives alleged that financial mismanagement and a poorly negotiated contract with General Motors led to the company’s abrupt closure on April 27.

The carrier had 723 trucks and nearly 585 drivers at the time it shuttered operations.

LME

LME, a regional LTL carrier based in Minnesota, abruptly ceased operations on July 11 as the trucking company faces numerous lawsuits stemming from a previous abrupt shutdown in November 2016.

The company had 424 truck drivers, 382 power units and 1,228 trailers at the time it ceased operations. 

The latest closure occurred just a month after the National Labor Relations Board (NLRB) ordered LME to begin paying out a $1.25 million settlement in June to union workers in Minnesota after its affiliate company, Lakeville Motor Express, abruptly ceased operations and failed to pay its workers in November 2016. The NLRB described LME as “the alter ego” of Lakeville Motor Express.

HVH Transportation

HVH Transportation, a 344-unit trucking company headquartered in Denver, abruptly shut down in late August, leaving more than 150 truck drivers stranded out on the road without working fuel cards.  

Some HVH drivers were forced to find their own transportation home, including James Delva, whose sister purchased a bus ticket for him to get back home to Lawrenceville, Georgia. 

“It’s not fair or right for drivers who dedicate themselves and practically live on the road in their trucks,” Delva told FreightWaves. “I am doing my job, driving safe and careful, but I’m not being paid for my time and hard work.”

The carrier had been operating since 1956, but was acquired by HCI Equity Partners, a private equity firm, in October 2012. 

GDS Express

Some smaller carriers did not fare well in 2019. GDS Express of Akron, Ohio, which had about 75 drivers, shuttered operations just five days before Christmas, stranding some drivers without fuel as employees tirelessly worked to get them home. 

There are still no answers as to why the company abruptly shut down, but the company’s former director of recruiting blamed “mismanagement” for the carrier’s collapse. 

Hendrickson Truck Lines Inc.

Family-owned Hendrickson Truck Lines Inc. of Sacramento, California, filed for bankruptcy protection in late November, citing a soft freight market, loss of two key customers and a bad truck leasing agreement.

The carrier had about 90 trucks and 97 drivers at the time it closed its doors.  

Carney Trucking Company
One crash is all it took for Carney Trucking Company, a Gilbertown, Alabama-based flatbed carrier, to shutter operations in early August after its insurance rates spiked.

“We had a major accident last year,” David Carney, an executive of the family-owned carrier, told FreightWaves. “Once we got the insurance quote, we tried to make it work, but we just couldn’t.”

The fleet had about 25 drivers and had been in business since 1983. 

Tags

Clarissa Hawes, Senior Editor, Investigations and Enterprise

Clarissa has covered all aspects of the trucking industry for 14 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.

55 Comments

  1. Its always tough to comprehend the issues with the trucking & transport considering that the US has seen a steady economic flow.
    The conversation of Falcon and what happen with fuel cards reminds me of the issue Flying J left drivers in across the US
    Swift stock was being purchased in 2014 by a group of private investors and the steady on the rise J.B Hunt transportation had a huge announcement in 2014 that likely gave stock holders the comfort needed to believe that J.B Hunt transportation is likely headed to the top of the transport world. The announcement of the successor heir grandson Towery Maurice Burris known as J.B Hunt jr. was made in Charlotte North Carolina. The heir is confirmed to be a blood heir of J.P Morgan. His influence was felt immediately with J.B Hunt trucking division & with the company’s diversity program.

  2. If they leave you on the road and no way to get home sell the product and leave the truck at a truck stop,see if they dont change their minds,no load they dont get payed

    1. 📰 The buzz in what sounds like is a struggling transportation economy
      Is the J.B Hunt Transportation announcement.
      We got the news in mid 2014 of the heir grandson in NC. The news came out of Shelby, Cleveland County NC. The marketing & promotion campaign seen on YouTube detailing the history & vision of the company in Johnny & Johnelle Bryan Hunts on words is fckn heart felt. The information & insight given by drivers show a stable & diverse company that’s appealing. Now to hear of a grandson who is the successor heir in Shelby NC was shocking but to learn of him being dark skin an multi racial in his 40’s Wow. Makes you wanna do ya homework. Learn who is behind the name J.B. Hunt Jr. Is he Towery M Burris?
      Cleveland County is known in trucking for what’s taken place over the years with a steady decline in textile & warehouse facilities. Issues with nearby Gaines & Freightliner. Expect the to see the bigger trucking divisions to thrive during what’s being reported as a down economy.

      1. I’m a small trucking company operating six power units and ten trailers our biggest problem is new emission style trucks not dependable at all how much longer are we going to take being pushed around by this agenda

  3. Speaking of a lack of pay or low wages . I’ve always advocated that labour unions should include employee stock options in their wage/benefit negotiations at the bargaining table rather than ask for peanuts . I’m certainly not pro union , I just care for the one’s getting the short end of the stick .

    I myself lean towards socialism . We’re heading in that inevitable direction anyways . However, I also lean towards equalism

    You may want to look into this though .(wink)

    Quote:

    “Here Are The Key Truths About U.S. Economic Inequality:

    Rising U.S. economic inequality is not the fault of capitalism, but the fault of the Federal Reserve and unbacked fiat (aka “paper”) currency.

    Fiat currency and central bank market interference go against the very principles of capitalism.

    The left is using growing U.S. wealth and income inequality alarmism as a ploy to attack the straw man of “capitalism” for the purpose of instituting socialism.

    U.S. wealth and income inequality is the result of a long-term Fed-driven bubble in household wealth (which is due, in turn, to bubbles in stocks and bonds).

    The long-term U.S. stock and bond bubble started inflating in 1981/1982, which is exactly when the rich-poor gap started to increase (that is no coincidence!).

    The rich own a disproportionate share of the stock and bond market, making them the prime beneficiaries of the stock and bond bubble.

    U.S. wealth and income inequality are largely driven by the same factors: the rich make their living as owners of capital (stocks and bonds), the middle class make their living through salaried work, while the poor earn income through a combination of work and government transfer payments.

    The U.S. wealth bubble is not a permanent situation: it is actually going to burst, which will cause the rich-poor gap to shrink.
    Americans should spend more time worrying about the wealth bubble and the economic crisis that will occur when it bursts, rather than the temporary wealth inequality that it has created.

    Socialism is the wrong medicine because it doesn’t strike at the root of the problem; free markets, ending central banking, and instituting sound money are the right medicine.

    The left/socialists do not address (or even mention!) the role of the Fed, fiat currency, and asset bubbles in driving U.S. inequality because they are completely disingenuous. They are not interested in genuine solutions – they are only interested in instituting socialism.”

    I certainly won’t defend the “left” . However, they are not “disingenuous” . They are wise , and they know better than to take on the “elite” with arrogance . If you don’t have something to offer them to replace their rigged game which would be just as profitable , if not more for them , it’s highly recommended not to even breath in that direction until you do .

    That being said , since that’s the way the “game” is structured , better to position oneself to take advantage of it rather than complain about it . Truckers need to wake up and smell the roses . UNITE and position yourselves to play the game the one’s you depend upon do for the big bucks ! Until then , you’ll just continue to get fleeced ! Truckers can no longer afford to be simply OO’s and or “employees” . What have the last 40 years taught us in this industry ??? BINGO !

    In my humble opinion …………..

    1. And by the way , the savvy play the bust as well . In fact , busts tend to be more rapid due to the panic it attracts .

      So the “savvy” have the best of both worlds in the “rigged game “.

      Fear & Greed is the name of the game !

      In my humble opinion …………..

  4. READ THIS CAREFULLY !

    Quote:

    “Starting in the early-1980s, the wealthiest 1% of families have significantly increased their share of America’s wealth, while the bottom 90% of families have experienced a decrease of their share of the country’s wealth. Starting in the mid-2000s, the wealthiest 1% of families actually surpassed the bottom 90% of families in owning a greater proportion of America’s wealth.”

    End quote .

    Isn’t that exactly what has been occurring to truck drivers , experiencing a decrease in wealth since deregulation ? This isn’t a coincidence .

    What I’m trying to get YOU to understand is that if you keep on complaining rather than position yourselves to do as the 1% does , you’ll just get more regulations and or some sort of “control” in return until YOU are replaced with technology . The 1% CONtrol this planet !

    If you go to a casino and you keep on winning you’ll be barred from the casino ! However, if you UNITE you’ll gain power . If you wisely apply that power , you can win until infinity in “their” rigged “casino” , and you won’t be barred from it EVER !

    Rather than reinvent the wheel , position yourselves to hop on the wheel that already exists . Then as you reap as the 1% does , you’ll have the “means” to really create change !

    Who the heck wants to waste their time with some sort of hocus pocus primitive “strike/shutdown” idea ??? UNITE , gain power , then apply that power wisely without breaking a single law .

    Understand ?

    In my humble opinion ………………

  5. it’s starting to become a unstable industrial… if all trucking companies are shut down…. world would come to a end… jobless and cripple the world…. many reasons to help honest companies… which ain’t many companies that are honest….

    1. J.B. Hunt Transport Services Inc. acquired the assets of RDI Last Mile Co. on Dec. 31, marking the company’s latest purchase of a final-mile service. Terms were not disclosed in a Jan. 2 news release.
      South Easton, Mass.-based RDI was founded in 1987, according to J.R. Hunt. The company generated annual revenue of $35 million, according to J.B. Hunt officials. RDI provides home delivery services of big and bulky products in the Northeast. CEO John Roberts said the company sees opportunity in the growing field of home delivery of large items. Insiders are seeking to hear from the mysterious heir grandson that was such a huge part of J.B. Hunts media presence in 2014. There is reports of a identity issue after reports of a identity theft in Shelby NC.
      What’s happening with nearby Gaines & Freightliner?

  6. The main thing is Low mileage pay. The industry is pulling for the same rates today at the end of 2019 as we did in the early nineties. No detention. Freight is moving today at 1.55 to 1.65 a mile. You can’t pay for 250,000.00 for equipment, insurance, and good driver pay. This just scratches the expenice surfs. The industry needs to grow some BALLS and stop hauling cheap freight. Last year when price where up and companies seen a profit, yes goods went up. Now we are hauling for dirt cheap again do you see prices falling in the stores? NO the stores are making a larger profit now. It is a shame we move the country but we are the first ones to get SH** on This includes the whole industry.

    1. I am a two truck carrier. You seem like you know the business. All the driver remarks on here are about them getting higher pay. I hired in 2018 my drivers make about $1500/week I have just broke even… if that, during 2019. I had a driver take time off now. I am hiring but I need a driver at .40/mile if I want to make any money out of this deal. I cant do .50 anymore. I dont make it to pay it. The drivers do not put in all the work of the business but they get all the pay right now. They dont understand it yet they cry that the carriers are dishonest. We are providing jobs where the pay is from 60k-75k / year. Yet I make nothing working day and night. When I say nothing. I mean I have a lot of cc debt that is not accounted at the moment trying to keep my drivers on the road.

  7. I don’t disagree with all of the reasons stated for why these companies failed. But at the same time state and federal governments have to take a large part of the blame. The federal government is placing more and more restrictions they do not allow drivers and trucks to make a profit while moving. And they add additional expenses such as the DEF system, and then necessity to purchase systems to heat and cool a sleeper because they will not permit idling. Maybe government should start working with the trucking industry before they close it altogether or raise the rates so high that consumers bear the brunt of the cost.

    1. 📰J.B. Hunt announces new acquisition: J.B. Hunt followers questioning what is the relationship between CEO Roberts and Successor Heir Towery Maurice Burris-Hunt. Burris-Hunt who took the name J.B. Hunt Jr is the publicly discussed heir in Shelby North Carolina who was named beneficiary of founder Johnny Bryan Hunt estate in 2013. He implemented a new marketing campaign featuring drivers in new converted trucks focusing on diversity being at the forefront of the campaigns which used YouTube to promote ads & videos of founders Johnny & Johnelle Hunt. There is a questionable video and its authenticity of who the man is speaking. Insiders report Roberts and Burris-Hunt have not spoken about the videos or the CEO position since 2014. The acquisition is a positive sign for the company during this period.

      LOWELL, Ark. (KNWA) – J.B. Hunt Transport Services announced on Thursday that its subsidiary, J.B. Hunt Transport Inc., acquired the assets of a Massachusetts company.

      The Lowell-based transportation and trucking company says in a press release it acquired RDI Last Mile Co. on December 31, 2019, in a transaction funded “using J.B. Hunt’s existing revolving credit facility.”

      Founded in 1987, RDI provides home delivery services of big and bulky products in the Northeast United States. The company generates annual revenue of $35 million, according to the release.

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