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Central Freight Lines is ceasing operations after nearly a century in business, the company announced Dec. 13.
The Waco, Texas-based less-than-truckload carrier said it had started winding down operations and ceased picking up new shipments. The company is in discussions with key customers and vendors, and expects sufficient liquidity to complete deliveries already in its system by Dec. 20.
“We make this announcement with a heavy heart and extreme regret that the company cannot continue after nearly 100 years in operation,” Central Freight Lines said in a statement. “We would like to thank our outstanding workforce for persevering and for professionally completing the wind-down while supporting each other. Additionally, we thank our customers, vendors, equipment providers and other stakeholders for their loyalty and support.”
End of the Line
“Central Freight is winding down its business. As of Monday, Dec. 13, we will no longer be picking up freight. We will continue to deliver the freight we have in our system. Thank you.”
Source: Central Freight Lines' website
Reports of the closure started to appear Dec. 11, saying the company notified drivers, employees and customers that it would start to wind down operations. The company confirmed the closure on itts website Dec. 13.
Central Freight soon after issued a press release with details on the situation. It noted that the company explored all available options to keep the business going, but operating losses sapped all remaining sources of liquidity. By the time the decision was made, liabilities far exceeded company assets — all of which are subject to liens in favor of multiple creditors.
“Despite diligent efforts, the company was unable to gain commitments to fund ongoing operations, fiKnd a buyer of the entire business or fund a Chapter 11 reorganization,” Central Freight President Bruce Kalem said in a statement. “Given its limited remaining resources, the company concluded that the best alternative was a safe and orderly wind-down.”
Kalem added that as the company completes the process its primary goal will be to offer the smoothest possible transition for all stakeholders while maximizing the amount available to apply toward its obligations.
“Central Freight is in negotiations to sell a substantial portion of its equipment,” Kalem said. “Additionally, Central Freight is coordinating with other regional LTL carriers to afford its employees opportunities to apply for other LTL jobs in their area. Discussions are ongoing, and no purchase of assets or offer of employment is guaranteed.”
Cowen and Co. said the closure further consolidates the LTL oligopoly in the U.S. and is likely to add support to an already strong pricing environment. The investment bank and financial services company see most carriers benefiting from this.
“Central had been in operations nearly 100 years but had been saddled with far too much debt in recent years according to market sources,” Cowen analyst Jason Seidl wrote Dec. 13. “In 2020, Central was ranked the 21st among LTL carriers with roughly $255 million in revenues. The company has full-state coverage in 14 states and partial coverage in three more across the south, south central and southwestern U.S.”
The company made efforts to try to stay afloat, including reshuffling its executive team nearly a year ago. That includes adding the company’s owner, Jerry Moyes, as its interim president and CEO. Moyes stayed on as CEO even after Kalem was appointed president in July.
Central Freight Lines ranks No. 98 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 21 on TT’s LTL list.
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