In November, six freight carriers declared bankruptcy, with some unsecured claims reaching into six figures.
According to documents from U.S. Bankruptcy Court reviewed by Equipment Finance News, these companies filed for Chapter 11 bankruptcy:
- Empire Trimodal Terminal filed on November 19 in West Virginia’s northern district;
- Orange Courier filed on November 21 in California’s central district;
- P Judge & Sons Trucking filed on November 14 in New Jersey;
- S & L Trucking filed on November 12 in Mississippi’s northern district;
- US Sikh Transport filed on November 11 in California’s eastern district;
- VP Direct filed on November 6 in Illinois.
Among the unsecured creditors is Milestone Equipment Co., a truck leasing and rental company, claiming over $760,000 as per the P Judge & Sons filing. In the case of Orange Courier, a company operating as Velocity Truck Rental and Leasing, which focuses on electric vehicle truck leasing, has an unsecured claim close to $472,000 related to a lease default.
BMO Financial Group is also seeking over $80,000 linked to eight Freightliner trucks and two Hyundai dry vans, as noted in the VP Direct filing.
Despite ongoing challenges within the industry, the number of bankruptcies in November represented an improvement, following 12 filings in October and 10 in September—both marking the highest monthly counts since Equipment Finance News started monitoring freight bankruptcies in early Q2.
Path to Recovery
Many carriers believe that a resurgence in domestic manufacturing could be critical for the trucking industry’s recovery from an extended recession, according to Dean Croke, a principal analyst at DAT Freight and Analytics. He remarked, “Without enhancements in domestic manufacturing, the truckload market will struggle to rebound,” drawing insights from various carriers.
Croke further emphasized the need for capacity reduction in the market, noting, “You can’t eliminate enough capacity to influence the situation.” Additionally, Chris Grivas, president of Chadds Ford-based CAG Truck Capital, pointed out that lingering overcapacity continues to pose issues. He highlighted lenders’ reluctance to repossess trucks, which is prolonging the downturn in freight.
While some loan extensions may be warranted, lenders must exercise control and repossess vehicles to safeguard collateral value. Grivas warned that extending credit to individuals without a plan leads to diminishing returns on asset values, urging lenders to “maintain vigilance to protect your assets and the overall health of the business.”
