The trucking industry has been entrenched in a Great Freight Recession since about March 2022, which created economic hardship for several companies and led to bankruptcy filings and firms shutting down operations.
Some industry trade websites are beginning to report an end to the freight recession, despite companies still filing for bankruptcy and ceasing operations.
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An increase in tender rejections to 6%, as reported by FreightWaves, may mean truckers are becoming more discriminating in choosing between multiple freight shipping requests. That's a sign that economic conditions might have improved and the trucking recession is over.
Related: Another troubled trucking company files Chapter 11 bankruptcy
Spot rates for freight are also reportedly rising higher than in 2022 and 2023, which could mean an increase in demand or a decrease in available capacity. Truckload rates have risen to $1.78 from $1.54 a year ago, FreightWaves said.
These developments are good news for truckers and trucking and logistics companies, but operators have still been shutting down and filing for bankruptcy lately despite improving conditions.
Trucking, logistics companies file bankruptcy
Miami, Fla.-based Star Transportation PA and five affiliates on Nov. 1 filed for Chapter 11 bankruptcy to reorganize their businesses. The move came after one of the company's lenders issued an order to repossess 47 of its trucks for which it had provided financing.
The debtor said in court papers that it faced the same financial stresses that the trucking industry has battled for several years. These include:
- Rising operating costs.
- Increasing insurance claims.
- High costs of maintaining and repairing trucks and trailers.
Previously, Irving, Texas-based Sunset Logistics on Oct. 3 filed for Chapter 7 bankruptcy to liquidate its assets after ceasing operations. The company blamed a bad economy, low freight rates, and rising costs.
The logistics company also faced a lawsuit filed by its factoring company Porter Capital, which sought to recover $5 million in debt from a defaulted recourse factoring agreement.
Related: Distressed hospital chain files for Chapter 11 bankruptcy
Another logistics company, freight forwarder company Boateng Logistics, on Feb. 22 filed for Chapter 7 bankruptcy, ceased operations, and liquidated after facing financial distress.
Image source: Shutterstock
McKevitt Trucking ceases operations
Finally, iconic cross-border trucking company McKevitt Trucking, which opened as a one-truck business in 1948, shut down operations on Oct. 31 for unknown reasons, FreightWaves reported.
More bankruptcy stories:
- Another popular pizza chain files for Chapter 7 bankruptcy
- Distressed retail chains file for Chapter 11 bankruptcy
- Iconic restaurant chain files bankruptcy after closing locations
The Thunder Bay, Ontario, Canada-based trucking company told its former drivers about three weeks ago that it would wind down its operations by Oct. 31.
The company had not yet filed for bankruptcy in Canada or the U.S. at last check.
The family-owned trucking company had grown to 165 tractors and 450 trailers at its peak and hauled general freight, household goods, building materials, refrigerated foods, and paper products in Canada and the U.S.
The company's financial hardship was increasingly evident. By the time it shut down operations, it had reduced its trucking business to 81 power units and drivers.
The company closed its Thunder Bay headquarters and terminals in Sault Ste. Marie, Timmins, Sudbury, North Bay, and Mississauga, Ontario.
McKevitt's bodily injury property damage insurance coverage is set to be canceled on Dec. 1, which confirms that the company's trucks will no longer be on the road beginning on that date.
Related: Veteran fund manager sees world of pain coming for stocks
