Trucking companies can’t seem to escape the duress of the freight recession.
Carroll Fulmer Logistics Corporation, a family-run trucking firm from Groveland, Fla. with more than 400 trucks and 1,700 trailers, ceased operations in late June.
The Florida-based Clermont Sun broke the news Tuesday that the 71-year-old company was shutting down, with partner Philip Fulmer blaming the recent freight climate and multiple lawsuits, which he claimed were frivolous.
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Carroll Fulmer was hit heavily with personal injury lawsuits, according to the report, with their lawyers handling six to eight complaints at one time, with each claim more than $250,000.
“There are many attorneys who make it seem easy to sue a trucking company,” said Fulmer. “Many of these lawsuits are bogus, meaning that no injury actually occurred, but we still have to fight them and that takes a lot of money.”
Fulmer had called the decision to close a last resort.
All Carroll Fulmer’s 100 Groveland employees will receive 60 days’ pay, with the company owners prepping to work with the town to help them find other jobs in the local community.
“We want to do right by our faithful employees, some who have been with us for many years,” Philip Fulmer told the Clermont Sun. “They matter to us. We hope to wind down as smooth as we can and attempt to get all vendors paid before we close.”
The end for Carroll Fulmer came less than three months after the trucking company secured a $27 million credit line from Gordon Brothers.
Alongside the Florida firm’s demise, Kal Freight is still in the process of liquidating more than $335 million in debt after filing for Chapter 11 bankruptcy last December.
Like Carroll Fulmer, Kal Freight cited the rough sledding throughout the three-year freight recession that ultimately suppressed margins at the company. The company operated 580 trucks and employed 600 drivers.
As part of the housecleaning, the Arlington, Texas-based trucking company agreed to return more than 1,500 trucks, trailers, dry vans and other vehicles to its secured lenders, which include Bank of America, Wells Fargo, Triumph Financial Services and more.
Kal Freight had $172.9 million in assets as of April 18.
CIMC Reefer Trailer is owed $12.7 million from Kal Freight, and is the creditor with the largest unsecured claims. The second largest creditor is its litigator, Cain Law, which is owed $3 million. All Solutions Insurance Agency and Continental Tire of America each have unsecured claims exceeding $1 million.
More trucking companies have recently filed for bankruptcy.
Indian Creek Express, a trucker based out of Pierce, Colo., filed for Chapter 11 on July 28. The company employees 40 drivers and operates 43 trucks.
According to the filing, the company owes $1.9 million to Daimler Truck Financial Services and $1.3 million to BMO Bank.
And on July 7, freight hauling company Daniel Trucking International also submitted a Chapter 11 filing to reorganize its business, listing $1 million to $10 million in assets and liabilities. The company operates 58 trucks and 59 drivers.
The bankruptcies come as the industry is down approximately 15 percent in volumes carried compared to 2022, according to Old Dominion chief financial officer Adam Satterfield.
In its second quarter ended June 30, Old Dominion saw total less-than-truckload (LTL) services revenue decline 6.1 percent to $1.4 billion. During the period, the company’s LTL tons per day fell 9.3 percent, with daily shipments decreasing 7.3 percent.
Shares of Old Dominion dropped 9 percent after the earnings report on July 29.
Chief LTL competitor XPO saw revenues in its LTL segment contract to a lesser degree, at 2.5 percent to $1.2 billion. Second quarter volumes per day declined 6.7 percent, whereas shipments per day contracted 5.1 percent.
XPO stock dipped more than 8 percent on the Thursday earnings.
The seemingly evergreen demand softness is an area called out by both these firms, as well as trucking companies like ArcBest and Knight-Swift in their recent earnings calls.
As the softness lingers, companies are also resorting to some job cuts, albeit temporary ones. Daimler Truck North America is temporarily laying off 573 workers in Gaston County, according to a Worker Adjustment and Retraining Notification (WARN) Act notice filed with the North Carolina Department of Commerce.
“As we navigate a challenging economic environment, we’ve seen a notable slowdown in new truck orders, particularly in our medium-duty, on-highway and electric vehicle segments,” said Daimler in a statement.
