Trucker New England Motor Freight Files for Bankruptcy, Plans to Shut Down
12 Febbraio 2019 - 1:12AM
Dow Jones News
By Jennifer Smith
New England Motor Freight Inc., a major player in the
competitive New York regional trucking market, sought bankruptcy
protection Monday and intends to wind down operations.
The trucking company owes tens of millions of dollars to
creditors including banks, a union pension fund and fuel
distributors.
The bankruptcy filing follows what many consider the best year
for trucking companies in recent history, as strong freight volumes
and tight capacity drove up the prices shippers pay for truck
transportation.
It is the largest trucking bankruptcy since 2002, when
Consolidated Freightways Corp. abruptly shut down, according to
Satish Jindel, president of industry research group SJ Consulting
Group Inc. That filing triggered disarray across supply chains and
left shippers' freight stranded at terminals amid questions of
payment and ownership.
New England Motor Freight and 10 related affiliates filed for
chapter 11 protection in U.S. Bankruptcy Court in Newark, N.J.,
with assets of $100 million to $500 million and debts between $50
million to $100 million. The company listed four banks -- JPMorgan
Chase & Co., TD Bank, East West Bank and Santander Bank -- as
its four largest unsecured creditors. It owes those bank more than
$59 million, according to court papers.
New England Motor Freight's longtime chairman, Myron P. Shevell,
is the father-in-law of musician Paul McCartney, and his daughter,
Nancy Shevell, has held various roles in the company, including
vice president.
The company is the 19th-largest U.S. carrier in the
less-than-truckload sector, with revenue of $402 million in 2017,
according to SJ Consulting Group. Less-than-truckload operators
combine orders from multiple customers on each truck.
A bankruptcy lawyer for New England Motor Freight couldn't be
immediately reached for comment.
"We have worked hard to explore options for New England Motor
Freight, but the macro-economic factors confronting this industry
are significant, " Vincent Colistra, a senior managing director
with Phoenix Management Services Inc. and the trucking company's
chief restructuring officer, said in a statement posted to its
website.
A record low number of trucking companies went out of business
in 2018 because most were able to raise prices, said Donald
Broughton, principal at Broughton Capital LLC. "Demand for services
continues to be strong," he said. "What usually kills trucking
companies is when demand is dropping or they're unable to raise
rates or fuel rates are skyrocketing."
The filing will leave some shippers scrambling to line up
transportation as trucking capacity remains constrained. "Shippers
are going to feel the pain in service and rates," Mr. Jindel
said.
The biggest stand-alone LTL carrier in the U.S., Old Dominion
Freight Line Inc., of Thomasville, N.C., recently reported a $605.7
million net profit for 2018, with revenue that grew more than 20%
to about $4 billion.
Patrick Fitzgerald contributed to this article.
Write to Jennifer Smith at jennifer.smith@wsj.com
(END) Dow Jones Newswires
February 11, 2019 18:57 ET (23:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.