Latest news with #GreatFreightRecession
Yahoo
26-05-2025
- Automotive
- Yahoo
Trucking's historic slump: How overcapacity and undocumented drivers reshaped the industry
The trucking industry has faced its longest and deepest downturn in history, beginning in March 2022. This prolonged slump, known as the Great Freight Recession, has driven many trucking companies out of business. A sluggish goods economy contributed, but the primary cause is excess capacity. During the COVID-19 pandemic, high freight rates and government stimulus, coupled with cheap credit, spurred an influx of new trucking companies. Unfortunately, this overcorrection flooded the market with capacity, causing freight rates to collapse. To avoid bankruptcy, trucking firms slashed costs. The largest expense—driver wages—proved challenging to cut, as experienced, documented drivers resisted reductions. Many small firms turned to hiring drivers without work permits to reduce expenses. These workers often obtained Commercial Driver's Licenses (CDLs) in the U.S. without passing a domestic CDL test. Some states accepted foreign CDLs without verifying the driver's experience or qualifications, meaning many never proved they could safely operate an 80,000-pound truck. Additionally, some drivers lacked proficiency in English, complicating communication and compliance. Trucking became a lifeline for many immigrants, offering steady work, decent pay, and a place to live, as most truckers reside in their vehicles. For many, it marked a significant improvement over poverty in their home countries. These undocumented workers often accepted lower wages than their American counterparts and endured poor working conditions and unsafe equipment. In 2016, Department of Transportation (DOT) officials were reportedly instructed to overlook drivers' CDL qualifications and work permits and to accommodate those who didn't speak English. As a result, drivers without proper documentation or permits could not be placed out of service, even if DOT officials knew they lacked credentials. This influx of unqualified and undocumented drivers sustained excess capacity, keeping trucking rates low and bankrupting compliant companies with qualified U.S. drivers. It also increased highway dangers, as evidenced by rising fatality rates involving heavy-duty trucks. The Trump Administration has issued new guidance to enforce stricter labor, CDL, and English proficiency standards for truck drivers. Drivers caught operating without proper documentation or adequate English comprehension now face being placed out of service and potential deportation. While I deeply empathize with immigrants' struggles, this situation poses significant safety and fairness issues for the trucking industry. I hope these measures help the industry recover and thrive once again. Read more about continued issues with the CDL system here. The post Trucking's historic slump: How overcapacity and undocumented drivers reshaped the industry appeared first on FreightWaves.
Miami Herald
20-05-2025
- Business
- Miami Herald
Another major trucking company files Chapter 11 bankruptcy
The Great Freight Recession has been characterized by astronomical statistics that seem unreal. Over the last two years, thousands of trucking companies and freight brokerage firms have permanently closed their businesses, and the situation is not expected to improve if the Trump Administration pushes forward with its tariff proposals for international trade partners. Don't miss the move: Subscribe to TheStreet's free daily newsletter About 88,000 trucking companies and 8,000 freight brokerage firms ceased operating in 2023, Freight Caviar data revealed. Last year, the trucking sector reported a net loss of about 10,000 carriers in the first half of 2024, according to Related: Major trucking company files Chapter 11 bankruptcy to restructure The American Trucking Associations was confident that the industry would improve in 2025 as it projected in its annual freight forecast released in January that truck volumes would grow 1.6% this year after two years of declines. That report, however, was completed before the Trump administration's tariff plans were fully revealed, and since then, several trucking companies have already filed for either Chapter 11 reorganization or Chapter 7 liquidation bankruptcies this year. Some have ceased operating their businesses without filing for bankruptcy, such as Michigan-based trucking company Equity Transportation Co. Inc., which had 100 drivers and 109 power units. The company laid off all of its drivers and ceased operations in March, according to several sources with knowledge of the situation, FreightWaves reported. Another huge trucking and logistics company LTI Trucking Services informed its 250 drivers on April 2 that it was shutting down its operations. The company said that it had exhausted all options made a difficult decision to close the company. Florida-based trucking company Davis Express Inc., with 160 trucks and 140 drivers, revealed on its Facebook page that the company was shutting down its business permanently after making its final deliveries on April 23 and returning all trucks to its terminal by April 30. The owner of the company said he will retire and does not want to wait any longer for the business to turn around or to find a buyer. The founder's family is no longer interested in continuing the business due to industry challenges, he said. Major trucking companies with dozens of drivers, tractors, and trailers have also filed for bankruptcy in the first half of the year, including transportation and logistics company Balkan Express and its affiliate Balkan Logistics filed for Chapter 11 bankruptcy to restructure their debts on April 30. Balkan Express operates 159 power units and employs about 166 drivers who ship general freight, including beverages. And three trucking companies that are not affiliated filed for Chapter 11 bankruptcy on April 7, 2025, including C&C Freight Network of Braselton, Ga.; Dedham, Mass.-based Best Choice Trucking LLC, and Memphis, Tenn.-based Best Logistics Inc., which all filed for bankruptcy to restructure their debts. Finally, the Great Freight Recession has dragged down another trucking company as AZA Transportation Inc. has filed for Chapter 11 bankruptcy to reorganize its business. Related: Classic auto parts company files for Chapter 11 bankruptcy The Mount Prospect, Ill., trucking and freight transportation company filed its Subchapter V petition on May 14 in the U.S. Bankruptcy Court for the Northern District of Illinois, listing $100,000 to $500,000 in assets and $500,000 to $1 million in liabilities. More bankruptcy: Iconic auto repair chain franchise files Chapter 11 bankruptcyPopular beer brand closes down and files Chapter 7 bankruptcyPopular vodka and gin brand files for Chapter 11 bankruptcy The company's creditors include merchant cash advance lenders, equipment finance companies for their trucks, fuel vendors, and tollway authorities. The company operates 70 trucks and employs 71 drivers, according to the Federal Motor Carrier Safety Administration's SAFER website, consisting of a fleet of Freightliner Cascadia and Volvo sleeper tractors and flatbed trailers. The company provides interstate transportation services in several states, including Illinois and Oklahoma. Related: Another major healthcare company files Chapter 11 bankruptcy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Miami Herald
05-05-2025
- Business
- Miami Herald
Major trucking firm files Chapter 11 bankruptcy for restructuring
The Great Freight Recession over the last three years has led to financial distress for many trucking, transportation, and logistics companies. Trucking companies have battled reduced shipping demand, lower freight rates, and rising costs of labor, fuel, and insurance, which have impacted revenues and profits. Don't miss the move: Subscribe to TheStreet's free daily newsletter Several trucking companies in April either filed for Chapter 11 bankruptcy or shut their doors without going bankrupt. Related: Major trucking company to shut down, no bankruptcy plans Madison, Ill.-based LTI Trucking, with about 250 drivers, 300 tractors, and 575 trailers, shut down its operations on April 2, but it had not filed for bankruptcy at last check. The company was a major shipper of products for AB InBev, KraftHeinz, Vlasic, Hershey's, Nestle, Tyson, Hillshire Farm, Kroger, Hostess, and Sara Lee. Florida-based trucking company Davis Express Inc. revealed on its Facebook page that the company was shutting down its business permanently after making its final deliveries on April 23 and returning all trucks to its terminal by April 30. The owner of the company said he will retire and does not want to wait any longer for the business to turn around or to find a buyer. The founder's family is no longer interested in continuing the business due to industry challenges, he said. All employees will be paid every and receive benefits through their June 15 pay period, the company said. Davis Express has 160 trucks and 140 drivers, according to the Federal Motor Carrier Safety Administration SAFER web page. It will lay off its drivers, but will continue to employ mechanics and operate its shop while the company takes equipment out of service and sells assets. April 7 was a bad day for the trucking industry as three companies filed for Chapter 11 protection on that day. Small trucking firm, Memphis, Tenn.-based Best Logistics Inc., filed for Chapter 11 bankruptcy under a Subchapter V petition in the U.S. Bankruptcy Court for the Western District of Tennessee. Another freight transportation and logistics company, C&C Freight Network, also filed for Chapter 11 bankruptcy to restructure its debts, facing economic problems. The debtor indicated that no funds would be available to distribute to unsecured creditors. And, Dedham, Mass.-based Best Choice Trucking LLC, filed for bankruptcy to restructure its debts, which include a large amount of vehicle financing. Finally, transportation and logistics company Balkan Express and its affiliate Balkan Logistics filed for Chapter 11 bankruptcy to restructure their debts on April 30. Related: Another struggling trucking company files Chapter 11 bankruptcy The Fort Worth, Texas, general freight trucking company filed its petition in the U.S. Bankruptcy Court for the Northern District of Texas listing $10 million to $50 million in assets and liabilities. More bankruptcies: Popular restaurant and bar chain files for Chapter 11 bankruptcyPopular athletic shoe chain files for Chapter 11 bankruptcyAward-winning cosmetics brand files for Chapter 11 bankruptcy The debtor indicated in its petition that funds would be available to distribute to unsecured creditors. Balkan Express operates 159 power units and employs about 166 drivers who ship general freight, including beverages, according to the Federal Motor Carrier Safety Administration's SAFER website. The company's website said that the company, which has operated for 16 years, has 150 trucks on the road and employs 250 people, covering 48 states. Balkan provides ground transport and freight forwarding services; trucking service; and logistic services, whether it is freight transportation, supply chain solutions, warehousing and distribution, temperature-controlled logistics, or customs, security and insurance; and 24-hour dispatcher support. M&T Capital filed a lawsuit against Balkan Express in March 2025, alleging the company owed it over $4.2 million in unpaid loans, interest, and attorney fees related to the lawsuit, FreightWaves reported. Related: Iconic trucking company closes down operations; no bankruptcy yet The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Yahoo
28-04-2025
- Business
- Yahoo
Mass layoffs in trucking are coming, says consulting firm
Apollo Global Management forecasts a severe U.S. recession triggered by recent tariffs, which will lead to widespread layoffs in the trucking and retail sectors amid rising economic uncertainty. The report, available on Apollo's website, paints a grim scenario: The trucking industry, critical to U.S. logistics, faces significant challenges as tariffs disrupt trade, particularly with China. A sharp decline in container ship voyages from China is expected to reduce freight volumes, thereby lowering demand for trucking services. Imports account for an estimated 20% of U.S. trucking volumes, so a decline in imports will have a significant impact on the industry. With fewer goods to transport, carriers will face reduced workloads and underutilized fleets, forcing them to cut labor costs. Apollo predicts that domestic freight activity will sharply slow by mid-May, with mass layoffs likely to follow as firms strive to maintain financial stability. The slowdown in trucking will put a lot of pressure on trucking companies that have been dealing with the Great Freight Recession, one of the longest and deepest downturns in retail sector is also bracing for substantial layoffs. Tariffs will cause supply chain disruptions, leading to inventory shortages, especially for goods from China. The decline in container shipments will leave retailers struggling to stock products, as longer lead times further complicate inventory management. Retailers may need to find alternative suppliers or reduce product offerings, both of which present challenges. Retailers also face declining consumer confidence driven by economic fears and tariff-induced inflation. Record-low consumer confidence scores reflect cautious spending, particularly on non-essential items, resulting in reduced store traffic and sales. Companies like Chipotle and Southwest Airlines have noted that consumers are saving more due to economic concerns. Rising credit card delinquencies and minimal payments indicate financial strain among consumers, further reducing purchasing power and exacerbating retail sales declines. Apollo expects retailers to cut jobs in June, amidst declining demand and higher costs. Apollo's broader economic outlook highlights a sharp decline in corporate spending, with new orders falling and inventories rising before tariffs took effect. Companies are lowering earnings forecasts and cutting investments due to a gloomy economic outlook, increasing the likelihood of layoffs across other industries. The tariff-driven slowdown could lead to stagflation—stagnant growth combined with high inflation—according to Apollo's analysis. Unlike typical recessions, where falling demand reduces inflation, trade disruptions are expected to drive up costs. Federal Reserve surveys indicate rising prices across supply chains, squeezing consumer purchasing power as incomes stagnate. Low consumer and business confidence, coupled with cautious spending, heightens the risk of consumer confidence is mirrored by reduced corporate spending and investment. As firms anticipate weaker demand, they are scaling back capital expenditures and revising earnings downward, reinforcing economic stagnation. This response reflects both immediate cost pressures and a longer-term adjustment to a trade-restricted economy. Apollo warns that rising prices and sluggish growth will heavily burden businesses and consumers. This stagflation scenario poses policy challenges, as traditional monetary tools may struggle to curb inflation while supporting growth. Strategic interventions are needed to mitigate the impact on vulnerable sectors and communities. Apollo's forecast paints a grim picture for the U.S. trucking and retail industries. Tariffs are disrupting supply chains and consumer behavior, putting both sectors at risk. Layoffs are often viewed as a necessary step to manage rising costs and minimize losses. Apollo's analysis serves as a critical warning, urging strategic preparations to navigate the impending economic storm. The post Mass layoffs in trucking are coming, says consulting firm appeared first on FreightWaves.
Miami Herald
17-04-2025
- Business
- Miami Herald
Major trucking company to shut down, no bankruptcy plans
Severe economic issues in the trucking industry over the last three years, a period which has been known as the Great Freight Recession, have forced companies to downsize operations, close down their businesses, and in some cases file for bankruptcy. The most common problems shipping companies have encountered are reduced shipping demand, lower freight rates, and rising costs of labor, fuel, and insurance. Don't miss the move: Subscribe to TheStreet's free daily newsletter A flurry of trucking companies filed for Chapter 11 protection on April 7, including Dedham, Mass.-based Best Choice Trucking LLC, which filed for bankruptcy to restructure its debts, which include a large amount of vehicle financing. Related: Another struggling trucking company files Chapter 11 bankruptcy Another freight transportation and logistics company, C&C Freight Network, also on April 7 filed for Chapter 11 bankruptcy to restructure its debts, facing economic problems. The debtor indicated that no funds would be available to distribute to unsecured creditors. Also, small trucking firm, Memphis, Tenn.-based Best Logistics Inc., filed for Chapter 11 bankruptcy on April 7 under a Subchapter V petition in the U.S. Bankruptcy Court for the Western District of Tennessee. In some cases, trucking companies have shut down but did not file for bankruptcy. Financial difficulties resulted in huge transportation company LTI Trucking, with about 250 drivers, shutting down its operations on April 2, but it had not filed for bankruptcy at last check. The Madison, Ill., trucking company, which was established in 2005, had 300 tractors and 575 trailers. The company was a major shipper of products for AB InBev, KraftHeinz, Vlasic, Hershey's, Nestle, Tyson, Hillshire Farm, Kroger, Hostess, and Sara Lee. Finally, Florida-based trucking company Davis Express Inc. revealed on its Facebook page that the company will shut down its business permanently after making its final deliveries on April 23 and returning all trucks to its terminal by April 30. Related: Another huge auto parts brand files for Chapter 11 bankruptcy "The last few years have been very challenging for refrigerated trucking as costs continue to rise while rates remain flat or have decreased," the company's President and Owner, Jimmy Davis, said in the Facebook post on April 16. More bankruptcy: Popular breakfast dining chain files for Chapter 11 bankruptcyHuge national car wash chain files Chapter 11 bankruptcyTroubled trucking company files for Chapter 11 bankruptcy "Although the company has been unprofitable the past several years, we are not broke, bankrupt, nor do we have any cash flow problems. There are sufficient funds to pay out all employees, vendors, and creditors timely," Davis said. The owner of the company said that he is ready to retire and does not wish to wait any longer for the business to turn around or to find a buyer. The founder's family is no longer interested in continuing the business due to industry challenges, he said. All employees will be paid every Friday and receive benefits through their June 15 pay period, he said. Davis Express has 160 trucks and 140 drivers, according to the Federal Motor Carrier Safety Administration SAFER web page. It will lay off its drivers, but will continue to employ mechanics and operate its shop while the company takes equipment out of service and sells assets. The family-run business filed a 60-day Worker Adjustment and Retraining Notification notice stating that 146 employees will be laid off on June 15, 2025, and the remaining 17 will be laid off on Aug. 31, 2025. The workers include 117 drivers, 35 office employees, and 11 mechanics. The Starke, Fla., company, which has operated for 44 years, has been unprofitable since early 2023, and Davis said he doesn't see any signs of improvement in 2025. Related: Struggling fashion accessory brand files Chapter 11 bankruptcy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
