Major shipping company shuts down; no bankruptcy filing yet
According to The Street, Since 2022, the freight trucking industry has experienced a deep recession, leading numerous shipping companies to file for bankruptcy or shut down entirely without filing a petition. Declining demand, rising interest rates, and inflation have made it difficult for many in the industry to stay afloat.
Pride Group’s Bankruptcy and Liquidation
One of the largest companies affected is Pride Group, a massive shipping company operating a fleet of approximately 20,000 tractor-trailers across 50 locations in Canada and the U.S. On March 27, 2024, Pride Group filed for protection under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice, aiming for either a going-concern sale or a wind-down of its operations. The company cited the financial impact of the COVID-19 pandemic as the primary reason for its decline.
On April 1, 2024, Pride Group also filed for Chapter 15 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware to protect its U.S. assets from creditors. As of August 6, 2024, Pride Group’s fleet comprised 1,459 trucks and trailers, with 1,383 owned by the company.
DRF Logistics and More Companies Exit the Market
Austin, Texas-based DRF Logistics, a global e-commerce shipping company, filed for Chapter 11 bankruptcy on August 8, 2024, in the Southern District of Texas. DRF Logistics had been acquired by Pitney Bowes in 2017 but reported losses every year since. The company is now seeking to wind down and liquidate its business.
Other shipping companies have also succumbed to the economic downturn. Freight forwarder Boateng Logistics shuttered its operations after filing for Chapter 7 bankruptcy on February 22, 2024, with plans to liquidate. Similarly, 92-year-old trucking company Arnold Transportation Services closed its doors and laid off all employees just five days before filing for Chapter 7 liquidation on April 30, 2024.
U.S. Logistics Solutions, owned by private equity firm Ten Oaks Group, filed for Chapter 7 bankruptcy on June 21, 2024, in the U.S. Bankruptcy Court for the Southern District of Texas. The company shut down operations, laid off its employees, and is preparing to liquidate its assets.
Midwest Transport Ceases Operations Without Filing for Bankruptcy
Midwest Transport, a Robinson, Illinois-based trucking and logistics company, has abruptly shut down operations despite not filing for bankruptcy as of September 6, 2024. The company, which employs over 480 drivers and approximately 650 workers, is one of the largest transportation contractors for the U.S. Postal Service. It has earned accolades, including the prestigious Eagle Spirit Award for mail transportation contractors.
Sources report that Midwest Transport’s regional managers notified employees by phone on September 5 that the company was winding down operations. The closure came as a surprise to many former drivers, who had received warnings in the months prior about the importance of logbook certifications, speed monitoring, and on-time performance improvements. Despite these efforts, Midwest Transport has ceased operations, leaving its employees in uncertainty.
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The company, founded in 1980, operated key terminals in Greenup, Illinois; Harmony, Pennsylvania; Jacksonville, Florida; Memphis, Tennessee; and Tampa, Florida. A spokesperson from the U.S. Postal Service has not yet responded to requests for comment on the situation.
