With only a few weeks until, Christmas more than 2,100 trucking industry professionals found themselves out of a job as Central Freight Line in Waco, Texas, shuttered.
The outfit sustained economic challenges for a reported 96 years, establishing a reliable source of employment and possessing a fleet of approximately 1,200 trucks. Many organizations have enjoyed increased profitability due to truck driver shortages and importers paying exceeding high rates. Unfortunately, Centra Freight found itself sinking in debt despite generating more than $262 million in revenue.
Even after an influx of cash from ownership to buoy the company, the 23rd largest revenue-generator of its kind in the U.S. was losing money. The less-than-truckload operation suffered a $67 million shortfall last year and upwards of “a quarter-billion dollars in the past years,” according to Central Freight Lines president Bruce Kalem.
“The company has been hemorrhaging cash and had operating losses for many years. It got to the point that our liquidity dried up,” Kalem reportedly said. “Our owner has put a fortune into the company. We were just tapped out.”
Hoping to pull out of the financial tailspin, Central Freight tapped Swift Transportation founder Jerry Moyes to lead as CEO in December of 2020. The move and receiving $10 million in Payment Protection Program money may have bought truckers and other personnel more time. But the clock struck midnight, with most employees being forced to file for unemployment or secure jobs elsewhere after Dec. 20.
“We seemed to try everything,” Kalem reportedly said. “Nothing seemed to work. In the end, we just couldn’t get enough drivers to move our freight.”
The supply chain has been unforgiving in recent years. In 2019, truckload carrier Celadon Group filed for Chapter 11 bankruptcy during a stretch when less-than-truckload operation New England Motor Freight closed. Central Freight ranks among the largest trucking employers to shutter since those closures.
“This comes as a surprise to us, and we are definitely sad to see the business close. Right now, our thoughts are with employees. We are reaching out to the company to see how we can assist those displaced find work with other employers in the area,” senior vice president of the Greater Waco Chamber of Commerce Kris Collins reportedly said. “I think there are lots of carriers still needing drivers, even locally, as job postings would indicate. It should be relatively easy for those individuals to transition to new employment if they want to.”
But former Central Freight workers appear troubled by the company not waiting until after the holidays to orchestrate the mass layoffs. Led by former employee Aaron Cox, a class action lawsuit was reportedly filed against Central Freight in the U.S. District Court for the Western District of Texas. The complaint reportedly states that Central Freight did not make good on “wages, salary, commissions, bonuses, accrued holiday pay and accrued vacation pay for 60 days following their respective terminations.” And, it “failed to make 401(k) contributions and provide them with health insurance coverage and other employee benefits.” The lawsuit and other actions taken by the company reportedly violate Texas labor statutes.
Sources: wsj.com, ccjdigital.com
That’s very unfortunate, been there. There’s jobs out there, but is it what you want. That’s where the shortages come in. Hopefully everyone will find a job that wants one. May God bless them.
Funny how many company drivers think the company is making huge profits off them. Not always, as you see here again.
Lot of competitors for the load money still
I’m sure that came from MISMANAGEMENT OF FUNDS and LOW PAY to do a million things. I saw one of their ads, they want you to work the dock too if you are not on a run instead of finding you some freight to haul. Some companies can’t make it if their CSA score is low and NO FUNDS to cover their ASS. It’s far too much freight out here that need to be moved EVERYDAY. There is money to be made to make a PROFIT if you MANAGE your business RIGHT.
One wonders what the pay levels were for the executives?…And did they get major raises while the company was “hemorrhaging cash”?
When Central Freight tapped Swift Transportation founder Jerry Moyes to lead as CEO in December of 2020…WHAT did they pay him to come over?
According to what I’ve heard he has a c d l and can drive a semi
Ltl always been very competitive look at ups freight they lost their ass
So while thousands are being laid off, 1 state to the west they are claiming a shortage of truck drivers is keeping hundreds of cargo ships floating on the ocean.
Problem here was central bought up too many other ltl carriers who were losing money and couldn’t absorb debt. Too much to chew and swallow
Now Central owes we taxpayers $10,000,000 that I’m betting we never see, like we never saw anything from Solyndra or a host of other companies taxpayers were unconstitutionally forced to support. Can anyone say, “Government Motors”?