Editor’s note: This story was originally published Nov. 8, 2019. Celadon Group abruptly filed for bankruptcy a month later, Dec. 8, and a wave of small to mid-sized-fleets closed their doors in the first six weeks of 2020. With news of carrier bankruptcies popping up again in recent weeks, a look back at this in-depth report on the conditions surrounding bankruptcies and whether they point to industry distress — or simply closures that caught headlines.
Carriers in 2018 reaped the rewards of strong rates and tight capacity, but 2019 will close on a much different note, and the return to normal has been difficult for some fleets, leading to layoffs, losses and a few high-profile fleet closures.
“Last year, it was almost impossible to go out of business. You had a historically low failure rate,” said Donald Broughton, principal & managing partner of Broughton Capital.
According to Broughton, 310 carriers called it quits in 2018. By September 2019, more than double that amount – 640 companies – had folded.
“It looks like a dramatic jump, and it indeed it is, but it’s off an extraordinary, all-time low,” Broughton said.
Carriers counted among CCJ’s Top 250 have not been immune. New England Motor Freight (No. 67 in 2018) closed its doors in February and HVH Transportation (No. 231) folded in August. Falcon Transportation and LME, Inc. shut down in April and July respectively. Swift Logistics, a subsidiary of Swift Transportation and the Swift-Knight conglomerate (No. 4), Stevens Transport (No. 38) and Roadrunner (No. 31) all recently announced layoffs.
“While there certainly have been some bankruptcies, including some high-profile bankruptcies in both the LTL and truck loads space, I don’t think there’s been an alarming number of bankruptcies to-date,” said Mark Montague, senior industry pricing analyst at DAT Solutions. “The ones that have occurred have been very high profile because there was an absence of any failures last year with the really good rates.”
