• ITVI.USA
    12,649.840
    -133.150
    -1%
  • OTRI.USA
    27.930
    -0.300
    -1.1%
  • OTVI.USA
    12,598.890
    -131.290
    -1%
  • TLT.USA
    3.230
    -0.060
    -1.8%
  • TSTOPVRPM.ATLPHL
    2.890
    0.260
    9.9%
  • TSTOPVRPM.CHIATL
    2.930
    -0.150
    -4.9%
  • TSTOPVRPM.DALLAX
    1.280
    0.100
    8.5%
  • TSTOPVRPM.LAXDAL
    3.000
    -0.210
    -6.5%
  • TSTOPVRPM.PHLCHI
    1.750
    0.120
    7.4%
  • TSTOPVRPM.LAXSEA
    3.280
    -0.080
    -2.4%
  • WAIT.USA
    121.000
    1.000
    0.8%
  • ITVI.USA
    12,649.840
    -133.150
    -1%
  • OTRI.USA
    27.930
    -0.300
    -1.1%
  • OTVI.USA
    12,598.890
    -131.290
    -1%
  • TLT.USA
    3.230
    -0.060
    -1.8%
  • TSTOPVRPM.ATLPHL
    2.890
    0.260
    9.9%
  • TSTOPVRPM.CHIATL
    2.930
    -0.150
    -4.9%
  • TSTOPVRPM.DALLAX
    1.280
    0.100
    8.5%
  • TSTOPVRPM.LAXDAL
    3.000
    -0.210
    -6.5%
  • TSTOPVRPM.PHLCHI
    1.750
    0.120
    7.4%
  • TSTOPVRPM.LAXSEA
    3.280
    -0.080
    -2.4%
  • WAIT.USA
    121.000
    1.000
    0.8%
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. It is ELD’s and the government getting involved in shit it shouldn’t. Everything the government gets ahold of it manages to screw up and trucking is just the latest example. All these people that have never driven a truck telling a professional driver how to do their damn job. It goes for politicians and CEOs, stay out of a business you have no idea about.

  2. From what I read and see the problem with these companies shutting down is all about greed and mismanagement, not the drivers not the warehouse workers, so if you hear anything about your company taking on new partners, update your Resume, and just be ready……so I don’t see no economic slow down coming from the Trump administration it’s coming from the assholes who mismanage these companies, we all had or have a jerk off for a boss, and we always wonder how he got there…..

  3. Examples of greedy management. Drivers sell their soul to the road, company and brokers. Why not work to capacity, with minimal expansion, instead of major increases of rolling stock.
    Take the executives out of the office and put them on the road. Let them explain why they won’t be home for two weeks. Missing their children’s birthday: too bad!
    Keeping your family together: you had better have a strong partner.
    Twist your ankle tarping a load: two weeks WITHOUT pay: too bad!
    Truly unfortunate, especially at this time of the year, or anytime.

  4. Bull the economy is good, it’s the government mandate and greed of the company owners. In the construction side with dump business hasn’t been this good in years making a hell of lot more profits this year than last.

  5. Someone showed me a screenshot from this website stating ‘Landstar Ranger was going under in 2020’. Is that supposedly true? I can’t find the article anywhere.

    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.

  6. Shippers are saying we are looking for a motor carrier we can Rip OFF we don’t want to do business with these people. I heard that when I was a Crete driver at a Chicago area shipper.

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