Another Trucking Company Closes.

Topic 26562 | Page 1

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Bird-one's Comment
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HVH transportation shut down abruptly about two weeks ago. CEO cited insurance rates that sky rocketed from last year.

https://www.ttnews.com/articles/hvh-transportation-denver-closes

Rick C.'s Comment
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I read recently, probably right here, that freight bookings are down 6% year over year, and they say trucking is a leading indicator of the economy...

Rob D.'s Comment
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In the first half of 2019, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That's more than triple the amount of bankruptcies from the same period last year — 175.

Trucking Companies that Went Bankrupt in 2019

Bird-one's Comment
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Wow, I didn't realize it was that. I guess companies shutting down are old news this year.

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In the first half of 2019, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That's more than triple the amount of bankruptcies from the same period last year — 175.

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Trucking Companies that Went Bankrupt in 2019

Cantankerous Amicus's Comment
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But amid rock-bottom rates, Wilburn wasn't able to make a payment one month — and his truck was repossessed.

"I was only six months away from paying it off," Wilburn told Business Insider.

I suspect there is more here than meets the eye... Where in the world does a bank repo a vehicle six months away from paying off the note when the debtor misses only one payment?

Of the 640 companies that went bankrupt how many were individual owner operators?

That being said, what do the drivers here have to say about job security and prospects for new drivers in the industry? Are there rumblings in their companies or are things OK? I have been seeing people elsewhere on the internet -completely unrelated to the industry- talking about how the trucking industry is hurting for more drivers and pay is rising rapidly.

Owner Operator:

An owner-operator is a driver who either owns or leases the truck they are driving. A self-employed driver.

Old School's Comment
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That being said, what do the drivers here have to say about job security and prospects for new drivers in the industry? Are there rumblings in their companies or are things OK?

This business is very cyclical. Last year it was booming and a lot of people jumped in while it was good. Now many of them are falling away. It's typical stuff going on. The industry is solid with lots of potential for new employment. You want to stay with well managed companies who have a solid track record.

I've heard no "rumblings." I say that with a caveat. I did hear a terminal rat saying Knight/Swift would be out of business in three months! I certainly wouldn't consult that meathead for financial advice! smile.gif

Things are good - very good!

You have to remember that this is a commodities business. That gives it a level of risk that is tougher on the smaller operators. Economies of scale tend to give the advantages to the bigger players in a commodities business.

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

Cantankerous Amicus's Comment
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I wouldn't count the terminal rats predictions as rumblings but more rather like grumblings.

Some of the companies on that list had been in business for over two decades and they only had a small number of drivers. I'd be willing to bet that the owners were either not adept enough at growing their companies or maybe they were complacent with the size they had attained. In any case it's amazing that they lasted as long as they did in a business where profit margins are so thin and any old downturn could put them in the whole.

Terminal:

A facility where trucking companies operate out of, or their "home base" if you will. A lot of major companies have multiple terminals around the country which usually consist of the main office building, a drop lot for trailers, and sometimes a repair shop and wash facilities.

OWI:

Operating While Intoxicated

Cornelius A.'s Comment
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From a lot of company owners , the trade fight that Trump has been having with China has been hurting them big time

PackRat's Comment
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From a lot of company owners , the trade fight that Trump has been having with China has been hurting them big time

Because most of the new start ups only saw the pot of gold and did not correctly plan for the hard times when rates dropped to near normal levels. Lack of planning leads to poor results. In their case too much money going out and not enough coming in. Simple economics.Rates now are what they were 24 months ago, so it has little to do with Thr President. Nice try, though.

Biggest problem right now: rates lower than 2018 and out of control insurance rates, helped by tort lawyers.

End of rant.

PJ's Comment
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The market largely is in a reset of sorts as has been said. Rates are self-correcting after the boom last year. I have been seeing changes since about June 1. After watching things 2 weeks ago I met with my regional operations manager for a brief meeting. To my suprise, he appeared to be very open and honest. I also know there are other things I’m sure he didn’t share with me, but that is expected.

Bottom line is we started our normal freight slowdown period approx. 2 months earlier and we have lost some rates because of a two-prong effect. First is the rates self-adjusting and second we as a company have entered into cheaper contracts with 3 very large customers to keep their business because our overall drivers lack of performance.

I have noticed a lot more drivers disappearing. He confirmed they are cracking down on performance and shedding drivers that do not improve.

We are in for a bit of a rough patch. I knew the good times were not forever. I have money in the bank and I have been very strict on my extras. I’ll keep doing as I have and I’m sure everything will work out just fine.

I think it was insane to keep drivers that were poor performers, but that is just my take. I guess it was better to hang onto them to fill a seat instead of hiring new ones. Until it has snowballed to the point it is costing them in having to lower the rates.

Regional:

Regional Route

Usually refers to a driver hauling freight within one particular region of the country. You might be in the "Southeast Regional Division" or "Midwest Regional". Regional route drivers often get home on the weekends which is one of the main appeals for this type of route.

SAP:

Substance Abuse Professional

The Substance Abuse Professional (SAP) is a person who evaluates employees who have violated a DOT drug and alcohol program regulation and makes recommendations concerning education, treatment, follow-up testing, and aftercare.

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