Just before Christmas, 2100 employees will be fired. Central Freight Lines is the largest trucking company to close since Celadon shut down in 2019.
Central Freight Lines, based in Waco, Texas, has informed drivers, employees and customers that under-truck carriers will be shut down on Monday 96 years later, the company’s president. Told Freight Waves on Saturday.
“That’s just terrible,” said CFL Chairman Bruce Kalem.
Sources close to CFL said that even though CFL is considering all the options available to keep the door open, “too much debt and unpaid bills” to continue operation. There are too many books, “he told Freight Waves.
“Year-years of operating losses and years of struggle have robbed us of our liquidity, and at this point we had nowhere else to go,” Kalem told Freight Waves. “No one is going to make money with this closing, nobody.”
According to the company’s statement, Central Freight will stop receiving new cargo on Monday and will deliver virtually all cargo in the system by December 20th.
A source familiar with the company said it was unsure whether the CFL would submit Chapter 7 or “liquidate other than bankruptcy,” but said it had no plans to reorganize its LTL carriers.
The company replaced its management team almost a year ago to maintain its ups and downs, including the addition of company owner Jerry Moise as CFL’s interim president and chief executive officer. Moyes remained CEO after Kalem was promoted to president in July.
“I think it was surprising that the whole company didn’t have buyers, but the buyers were interested in certain parts, but not the whole,” a source who didn’t want to be identified told Freight Waves. .. “It’s possible that only the network is vast and there is too much overlap with some buyers, so it wasn’t necessary to place places or employees where they were already doing strong work.”
GlobalTranz, a third-party logistics provider, has informed its customers that it has removed CFL as an “immediately comprehensive and CSP carrier option to prevent new bookings,” sources told Freight Waves on Saturday.
A CFL spokeswoman said the CFL, which has more than 2,100 employees, including 1,325 drivers and 1,600 power units, “is in talks with key customers and vendors to complete orderly deliveries next week. We expect sufficient liquidity. ” Approximately 820 employees are based at Waco’s headquarters.
Despite hard-working efforts, the CFL “could not get a promise to fund an ongoing business, find buyers for the entire business, or fund the reorganization of Chapter 11. “Another source familiar with the company told Freight Waves.
According to Kalem, the company had 65 terminals before deciding to shut down.
FreightWaves received information from sources almost two weeks ago that CFL had not renewed its East Coast terminal lease but could not confirm the information with CFL executives.
Another source told Freight Waves that some of the LTL carriers’ West Coast terminals were recently sold, but no reason for the deal was given.
At the time, Kalem said the company was “working to find an alternative” and couldn’t speak because of a nondisclosure agreement. He said CFL executives, including Moyes, are trying to do everything to “save the company.”
“Jerry [Moyes] We put a lot of money into the company, but that wasn’t enough, “Karem said.
Karem knows that major carriers are interested in hiring many of the CFL drivers, but said they can’t name them at this time.
“Central Freight is in talks to sell a significant portion of its equipment,” the company said in a statement. “In addition, Central Freight coordinates with LTL carriers in other regions to provide employees with the opportunity to apply for other LTL jobs in that region.”
As of late Saturday night, Mr. Kalem said that the fuel card was working and the price of the cargo carried for the LTL carrier until all the cargo was delivered by the target date of December 20th. He said he would be paid to the driver.
“I’m going to work hard in the time I have left to get the job of these good people — I owe it to them,” Kalem told Freight Waves. “We’re going to pay the driver — that’s why we had to close it as we do now. We’ll deliver all the cargo in our system by next week. It’s a plan and we believe we can do it. “
At the beginning of the pandemic, Central Freight Lines was one of the four largest truck-related companies. Received a $ 10 Million Award through the US Small and Medium Business Administration Paycheck Protection Program (PPP). This happened when CFL drivers and employees were forced to reduce their wages. This move didn’t work for the driver.
“It all went to salary,” Kalem said of PPP funding. “Yes, our employees and drivers have reduced wages in the last few years, and we have returned most of them, even raised wages in the last few months, but it’s just the driver It wasn’t enough to attract. “
Freight Waves staff members Todd Maiden, Timothy Dooner, and JP Hampstead contributed to this report...
Freight Waves CEO and Founder Craig Fuller responds to Central Freight Lines news.
“Central has been struggling for many years and is unable to achieve profitability, so it makes sense to want to liquidate while equipment and real estate are gaining record prices.”
Central Freightline Statement
The statement issued by Central Freight Lines to Freight Waves late Saturday was after reports of its imminent closure surfaced.
“We sincerely regret that the company has been unable to survive after nearly 100 years of operation. We thank the talented people who have supported each other and have been patient and professionally completed the winddown. In addition, we thank our customers, vendors, equipment providers, and other stakeholders for their loyalty and support.
“We considered all the options available to keep our business going. However, operating losses robbed all remaining liquidity sources, and our debt far outweighed its assets, all of which. Eligible for Lien in favor of multiple creditors. Despite diligent efforts, we fund ongoing businesses, find buyers for the entire business, or fund the restructuring of Chapter 11. We couldn’t get the promise to provide. Given the limited resources remaining, we concluded that the best alternative was a safe and orderly dissolution process. The main goal in completing is to provide all stakeholders with the smoothest possible transition while maximizing the amount applicable to the company’s obligations.
“Central Freight is in talks to sell a significant portion of its equipment. In addition, Central Freight will coordinate with LTL carriers in other regions to allow employees to apply for other LTL jobs in the region. The discussion is ongoing and the purchase of assets and the provision of employment are not guaranteed. “
A brief history of the central freight line
|1925||Founded in Waco, Texas by Woody Callan Sr.|
|1927||Institute for regular Texas routes between Dallas, Fort Worth, and Austin.|
|1938||The Dallas facility has opened as the largest freight facility in the world.|
|1991||Acquires operational authority for the 48 interstate highways and expands to Oklahoma.|
|1993||Join the Roadway Regional Group and start the service in Louisiana.|
|1994||Expanded to Colorado, Kansas, Missouri, Illinois, Mississippi.|
|1995||Viking Freight, Inc. of Central, Coles, Spartan, Viking Freight Systems. Announced integration into. Central Waco headquarters begins closing.|
|1996||Viking Freight, Inc. It will be in the southwestern part of.|
|1997||The investment group, led by Senior Central Management, will purchase former CFL assets from Vikings Freight and reopen as the new Central Freight line.|
|1999||Expand to California and Nevada.|
|2009||The CFL network serves Idaho, Utah, Minnesota and Wisconsin.|
|2013||Acquired Circle Delivery in Tennessee.|
|2014||Acquired DTI, a Georgia LTL carrier.|
|2017||Acquired Wilson. We added 80 terminals and created a new department.|
|2020||Received the Carrier of the Year from Global Tranz. |
Volunteer Express, Inc. in Dresden, Tennessee.Acquired
https://www.freightwaves.com/news/exclusive-central-freight-lines-to-shut-down-after-96-years Exclusive: Central freight line closed after 96 years