Trucker Central freight lines shut down after years of losses
Trucking company Central Freight Lines Inc. will shut down in the coming weeks after failing to end years of losses despite strong demand in freight markets during the pandemic, the company said on Sunday.
The privately-held Waco, Texas-based company owns approximately 1,200 trucks and is a large LTL operator, a segment of the trucking industry in which carriers haul the shipments of multiple customers on a single trailer. Most operators in this industry have thrived over the past two years thanks to strong demand from retailers and manufacturers and the boom in online shopping spurred by the pandemic.
Central Freight Lines generated $ 262 million in revenue in its most recent fiscal year, said company president Bruce Kalem. Despite a large influx of money from its owner and managing director, Swift Transportation Co. founder Jerry Moyes, the company suffered a loss of $ 67 million last year, the latest in a series of losses that have totaled around “a quarter of a billion dollars in the past few years,” Kalem said.
“The business lost cash and suffered operating losses for many years. It got to the point that our liquidity ran out, ”Kalem said. “Our owner has put a fortune into the business. We have just been sidelined.
News of the shutdown was reported earlier by trade publication FreightWaves.
Central Freight plans to stop picking up freight on Monday and will not deliver freight by the end of this week or early next year, Kalem said. Most of its 2,130 employees will be laid off, with the exception of a handful who will shut down the company and sell its fleet.
Largest trucking failure since full load carrier Celadon Group Inc.
filed for Chapter 11 bankruptcy in late 2019, the same year regional LTL New England Motor Freight Inc. closed.
Central Freight Lines is the 23rd largest US LTL carrier by 2020, according to transportation research firm SJ Consulting Group Inc. The company provides service in the southern United States through a network of 65 freight terminals , Kalem said.
Founded in 1925, Central Freight Lines went through several changes of ownership and was acquired by Mr. Moyes in the late 1990s. It has expanded its operations through a few smaller acquisitions, Mr. Kalem said, but lost a major customer in 2016 and incurred substantial debt when it replaced its fleet over a four-year period that ended in 2017.
“We seemed to be trying everything,” Kalem said, including several leadership changes and strategy changes, ranging from lowering prices and increasing shipping volumes to increasing rates and lowering volumes.
The company received a $ 10 million paycheck protection program loan in April 2020 which has since been canceled, he said.
The company reduced the payroll, then increased wages to compete with drivers in a tight labor market. Mr Kalem said. “Nothing seemed to be working,” he said. “In the end, we just couldn’t find enough drivers to move our freight.”
Write to Jennifer Smith at [email protected]
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