2018 was a banner year for the trucking industry, with an increase of 14% in annual revenue over the previous year, totaling over $796.7 billion. 2019, however, was the opposite story; nearly 800 trucking companies ceased operations last year, more than double the rate of closures in 2018.

The whopping number of companies that closed their doors included some of the industry’s biggest players, as 2019 saw three of the 10 largest trucking company collapses in recent history. The largest ever trucking sector bankruptcy occurred when Celadon Group shut down in December 2019. The trucking giant had employed almost 3,000 drivers and about 1,300 non- administrative employees, but abruptly shut down after two Celadon executives were charged with accounted fraud for repeatedly inflating the company’s income.

“We have diligently explored all possible options to restructure Celadon and keep business operations ongoing, however, a number of legacy and market headwinds made this impossible to achieve,” Celadon CEO Paul Svindland said in a statement.

Another major trucking company, New England Motor Freight, shut down and filed for bankruptcy in February 2019, leaving 1,472 drivers without a job. President and COO of NEMF, Thomas Connery named “excessive regulation, significant toll increases, and the high cost of insurance” as factors contributing to the shutdown.

Following closely behind was the closure of Falcon Transport in April, with 723 trucks and 585 drivers in operation. Falcon was known as one of the largest flatbed operators in the U.S., but its downfall was partly caused by the fact that a large amount of its freight was tied to a General Motors plan which closed in March.

While the number of trucking company closures rose in 2019, the average size of these failed trucking companies was also larger than those in 2018. The previous year, the 310 trucking companies that closed had an average fleet size of just nine trucks, which meant 2,800 trucks were pulled off the road. The 795 companies that closed in the first three quarters of 2019 had an average of 30 trucks – meaning nearly 24,000 trucks were taken off the roads.

What caused so many trucking companies to fail in 2019? According to industry analysts, it was largely the cause of missteps by operators themselves. Some economic and political factors – namely, the trade war between the U.S. and China – caused a decline in demand and lower shipping rates than those of the previous year. And while a decline from 2018’s soaring prosperity was by no means a sign of disaster, but rather a return to normal, many carriers made the mistake of carrying on as though 2018’s historic market was the new normal

“A lot of [new operators] may have simply thought of the market that we had a year – 18 months ago – as sort of standard operating procedure and weren’t really prepared for what a normal market looks like,” Avery Vise, vice president of trucking at FTR Transportation Intelligence, said. Frank Holmes, CEO of US Global Investors, seconded this opinion, stating that over-expansion was a primary cause of these closures.

“Flush with cash, managements did what some other industries have been guilty of doing in boom years — they began to expand aggressively. Capacity growth exploded, and spending on drivers’ pay surged.” However, Holmes wrote that these companies didn’t anticipate the rising insurance costs, oversupply and impact of the trade war.

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