Bankruptcies, closures and fraud: Key trucking stories in 2024

2024 was another brutal year for trucking companies and freight brokerages. Thousands of firms called it quits, sought bankruptcy protection or both. Fraud-related stories also dominated the headlines. FreightWaves looks back at some of the year’s key stories.

Illinois-based Nationwide Cargo Inc. files for bankruptcy

Founded in June 2010, Nationwide Cargo Inc. of East Dundee, Illinois, filed for Chapter 11 bankruptcy on March 13. The company hauls general freight, fresh produce and meat, according to the Federal Motor Carrier Safety Administration’s SAFER website.

The petition, filed in the U.S. District Court for the Northern District of Illinois, listed Hristo Angelov as the president of Nationwide Cargo.

No reason was given as to why the carrier filed for bankruptcy protection, but it sought to reorganize, according to the petition. Nationwide Cargo listed its assets as between $1 million and $10 million and its liabilities as between $10 million and $50 million. It had 171 drivers and 183 trucks.

At the time of its filing, Nationwide Cargo was involved in three pending lawsuits in Tennessee, Illinois and Arizona. Read more here.

92-year-old Texas carrier files for bankruptcy liquidation

A 92-year-old trucking company, Arnold Transportation Services of Grand Prairie, Texas, which had 341 truck drivers and 402 power units, ceased operations in late April 2024 and filed for Chapter 7 bankruptcy liquidation.

Three affiliated companies — Parker Global Enterprises, Parker Transport Co. and DVP Holding Corp. — also filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware.

In February 2022, Arnold Transportation was acquired by Pride Group Logistics, an affiliate of Pride Group Holdings of Mississauga, Ontario, one of Canada’s largest trucking and leasing companies. Pride Group and its affiliates, including the four companies listed above, filed for creditor protection on March 28 in Canada, citing a capacity glut and low rates.

Pride Group stated in court filings that “Arnold has not been profitable and therefore Pride Logistics has been funding Arnold operations. Some of Arnold’s dispatchers are paid through Pride Logistics payroll.”

Former Arnold Transportation drivers reported being laid off without warning on April 25 and stated that their medical benefits were also canceled.

The company listed its assets as up to $10 million and its liabilities as between $10 million and $50 million, according to the petition, which stated that it has up to 199 creditors and that funds would be available for distribution to unsecured creditors. Read more here.

California Intermodal Associates Inc. blames independent contractor law for closure 

A family-owned trucking company and brokerage, California Intermodal Associates Inc. (CIA), headquartered in Commerce, California, was forced to cease operations in April 2024 after nearly 25 years, citing the state’s independent contractor law.

CEO Gabriel Chaul told FreightWaves the law – AB5 – was the main reason his company was forced to close. He said all hope that his company would survive faded in March after a federal judge in California rejected trucking and trade associations’ legal challenges to stop enforcement of AB5, a controversial state law that severely restricts the use of independent contractors.

“California is a hostile place to operate a business,” Chaul said. “This law has created a hostile operating environment and an environment of unfair competition.”

Chaul said his company complied with the law and switched his owner-operators over to become a company fleet of around 30 drivers.

“We had a hard time maintaining that number because they started falling off because they were enticed by our competition that builds its business with owner-operators,” he said.

Chaul said once he notified customers that the company was fully compliant with AB5, the phones stopped ringing.

“It seems like as soon as our customers knew that we were complying with the law and hiring employee drivers and had our own assets, our costs went up by as much as 30%,” he said. “There was no incentive to use CIA anymore.” Chaul’s company has not filed for bankruptcy. Read more here.

Texas-based US Logistics Solutions filed for bankruptcy liquidation

About 2,000 truck drivers, warehouse and dockworkers, and office personnel of Humble, Texas-based US Logistics Solutions (USLS), formerly Forward Air Solutions, say they were blindsided on June 20 when they were notified via conference calls or text messages that the company was ceasing operations and they would not receive paychecks the following day.

USLS, a logistics company that provided last-mile handling and distribution of time-sensitive products, had 500 drivers and 732 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website.

In a statement to FreightWaves after the closure and bankruptcy filing, a spokesperson for Ten Oaks Group, the private equity firm that owned the logistics firm, said the company was “deeply disappointed by the lender’s sudden decision to cease further funding for US Logistics Solutions, which left the company no time to provide advanced notice to employees or properly wind-down operations.”

From Jan. 1, 2024, to its filing date, the company listed its gross profits as around $70 million. In 2023, it made over $217 million and in 2022 it made $203 million. Read more here. 

LTL carrier Tony’s Express filed for Chapter 11 

Less-than-truckload carrier Tony’s Express of Fontana, California, filed for bankruptcy protection in June, nearly three months after it abruptly ceased operations by notifying around 200 truck drivers, warehouse workers and office personnel via text message that they no longer had jobs.

John H. Ohle, president and sole shareholder of Tony’s Express, bought the company in May 2023 from brothers Anthony “Tony” Raluy and George Raluy. Their father started the business in 1954.

Less than a year after acquiring Tony’s Express, Ohle shuttered operations of the 70-year-old carrier by sending workers a text message on March 28. The message, which was obtained by FreightWaves, notified employees that the company was closing its doors that day and could not cover the previous week’s payroll or workers’ paid time off.

“The current market just didn’t support our ability to operate and be a profitable company, and the cost of fuel in California made it very difficult,” Ohle told FreightWaves a few days after the closure. “We were in very serious discussions with two different companies about coming in and partnering or taking over Tony’s, and those fell apart at the very end, and literally, it was a last-minute decision.”

Tony’s Express filed its Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Central District of California, under subchapter V, which provides a path for small businesses seeking to reorganize.The filing for Tony’s Express listed both its assets and

Read the Full Article from FreightWaves