It’s been a rough year for the trucking industry following the red-hot market conditions of late 2020 and 2021.
Since the beginning of the year, spot rates have declined by 27.6%, according to the FreightWaves National Truckload Index. On the contract market, which comprises a larger chunk of the trucking industry, the rate to move a truck declined by 6% over the same period.
The cost to run a trucking company, however, has sharply increased despite this slump in rates. The retail cost of diesel has had the most shocking uptick: 36% higher from the beginning of this year.
But compared to the “trucking bloodbath” of 2019, the industry hasn’t seen a wave of large firms declaring bankruptcy. Trucking companies, instead, seem keen on expanding. Hiring activity, according to federal data that tracks preemployment queries for commercial drivers, has actually increased. Federal employment data reflects that trucking payrolls have increased by around 55,600 drivers, or a 3.6% increase, from January to November.
Resilience in the trucking industry could be a result of many trucking companies being flush with cash after the recent bull run.
Here are some of the small trucking companies that went bankrupt this year:
And here are the largest trucking companies that filed for bankruptcy in 2022:
Marvin Keller Trucking, 115 drivers.
FreightWaves’ Clarissa Hawes reported that Illinois-based Marvin Keller Trucking filed for Chapter 11 bankruptcy on April 22. The company was established in 1965 and, according to a Federal Motor Carrier Safety Administration database, remains in business.
Joseph Keller, the president of the trucking company, stated in the bankruptcy filing that the company was unable to keep up with fuel, wages and other operating expenses. Market conditions and the payment of a $10 million verdict pressured the company’s finances.
The verdict was a result of a March 2019 crash between a Martin Keller truck driver and a passenger driver. The passenger driver, 44-year-old Christopher Short, died as a result of the collision. In December 2021, a U.S. District Court jury entered a $10 million judgment in favor of the passenger driver’s wife and two minor children.
LandAir, 135 drivers.
LandAir, a Vermont-based less-than-truckload carrier, closed unexpectedly in July, FreightWaves’ Hawes reported. It was established in 1968 and specialized in hazmat.
On July 28, the Burlington Free Press reported that the company had filed for Chapter 7 bankruptcy. Jesse Andrasi, a former LandAir truck driver, told the newspaper that he was confused by the company’s shutdown, as leadership had recently told employees that the business was flourishing.
“So I was shocked to see this,” Andrasi said in an interview. “Just a messy and confusing situation.”
Corbel Capital Partners, a Los Angeles-based private equity firm, owned LandAir. As FreightWaves previously reported, Corbel decided to close the trucking company because of the rising costs associated with the trucking industry. Private equity firms are increasingly concerned with the low return on investment in the transportation industry.
UFI Transportation, 213 drivers.
United Furniture Industries, one of the largest furniture manufacturers in the U.S., terminated all of its 2,700 employees on Nov. 21. This included its trucking firm, the Mississippi-based UFI Transportation. According to a federal database, UFI Transportation employed 213 drivers.
As FreightWaves’ Hawes reported, truckers were told to “immediately return equipment, inventory and delivery documents for those deliveries that have been completed to one of the following locations: Winston-Salem, North Carolina; Verona, Mississippi; or Victorville, California.”
Some UFI customers told Hawes that they were unable to access inventory that remained locked in the company’s warehouses.
Matheson Postal Services, 383 drivers.
Several carriers that service the U.S. Postal Service filed for bankruptcy this year. By far the largest was California-based Matheson, which filed for Chapter 11 on May 5.
Matheson, established in 1962, is still operating and said in its May filing that it planned to reorganize.
The Postal Service has modernized aspects of its long-haul freight operations in order to slash spending. Dynamic Route Optimization is one key program, allowing the Postal Service to pay carriers per mile rather than through a set contract payment.
It’s a boon for the Postal Service, which has long struggled to manage costs, but it’s challenging for longtime service providers that must adapt to new technology and route plans. One trucking contractor told The Washington Post last year that the Postal Service’s new software has cost it $110 million and sparked hundreds of layoffs.
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