6 more freight carriers go bankrupt
Unsecured creditor Milestone Equipment claiming more than $760K
Six freight carriers filed for bankruptcy in November, with some unsecured claims going well into six figures.
These transportation firms filed for Chapter 11 bankruptcy, according to U.S. Bankruptcy Court documents obtained by Equipment Finance News:
- Empire Trimodal Terminal filed Nov. 19 in the northern district of West Virginia;
- Orange Courier filed Nov. 21 in the central district of California;
- P Judge & Sons Trucking filed Nov. 14 in the district of New Jersey;
- S & L Trucking filed Nov. 12 in the northern district of Mississippi;
- US Sikh Transport filed Nov. 11 in the eastern district of California; and
- VP Direct filed Nov. 6 in n district of Illinois.
Truck leasing and rental company Milestone Equipment Co. is among the unsecured creditors, claiming more than $760,000, according to the P Judge & Sons filing. In the Orange Courier filing, a company “doing business as” Velocity Truck Rental and Leasing, which specializes in EV truck leasing, has an unsecured claim of roughly $472,000 tied to a lease default.
BMO Financial Group is claiming more than $80,000 tied to eight Freightliner trucks and two Hyundai dry vans, according to the VP Direct filing.
Though industry challenges persist, November bankruptcies marked an improvement following the 12 filings in October and 10 in September, both the highest monthly totals since EFN began tracking freight bankruptcies at the start of the second quarter.
Road to recovery
Many carriers believe that domestic manufacturing could play a key role in the trucking industry’s recovery from its yearslong recession, Dean Croke, principal analyst at DAT Freight and Analytics, an industry research firm and service provider, told EFN.
“Until domestic manufacturing improves, you won’t see the truckload market recover,” he said, citing carriers’ feedback.
“The other side of the ledger is capacity reduction. You can’t get rid of enough capacity to change that equation.”
— Dean Croke, DAT Freight and Analytics
As lingering overcapacity issues persist, truck lenders must overcome their reluctance to repossess, which has prolonged the freight downturn, Chris Grivas, president of Chadds Ford, Pa.-based CAG Truck Capital, told EFN.
While loan extensions are necessary in some instances, lenders also must remain disciplined, repossessing as needed to preserve collateral value, he said.
“When you give an extension to someone with no work, no plan, you just took an asset that today you could have gotten $50,000 for and guaranteed that tomorrow you’re going to get $30,000,” he said.
“Keep a short leash and protect your assets and the integrity of the business,” Grivas said.
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