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Covenant Transportation Group is planning to close its Texarkana, Ark., terminal and relocate operations to other facilities, the company announced April 20.
Operations will start to wind down May 1.
The terminal closure is expected to result in a permanent reduction of approximately 150 support staff. The facility primarily served as the operating center for solo-driven refrigerated service.
“This action, while regrettable and extremely painful to many in our enterprise and especially to those directly impacted, is necessary to focus our staffing and capital towards our targeted business units and to lower overhead costs,” CEO David Parker said in a statement.
Southern Refrigerated Transport, a subsidiary that operated out of the Texarkana location, will be most affected. Parker assured workers that they will be provided severance and health care insurance support. The reductions in the workforce will not be impacting drivers.
Covenant plans to transfer all professional truck drivers and nondriving functions to other facilities in Tennessee. That includes its Chattanooga, Nashville and Greeneville locations.
Covenant will continue to provide solo-driven refrigerated service.
“The enterprise has detailed plans in place with the objective of continuing to deliver outstanding service for our customers and support our professional driving force from these locations,” Parker said.
The truckload carrier was facing a tough operating environment even before the pandemic. The company reported a 14% decline in consolidated revenue to $233 million over the year in its fourth-quarter earnings release.
But Covenant did report a strong balance sheet and liquidity in the same announcement as the relocation. The company reported approximately $75.3 million in liquidity as of March 31. There also are other potential flexible sources of liquidity such as more than $30 million in net book value of unencumbered owned revenue equipment and more than $105 million in net book value of accounts receivable attributable to the factoring business.
Covenant Transport Services ranks No. 42 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 37 on the TT list of the 50 largest logistics companies.
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