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December 9, 2019 2:45 PM, EST

Hendrickson Truck Lines Files for Chapter 11 Bankruptcy

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Hendrickson Truck Lines Inc., a small truckload and less-than-truckload carrier based in Sacramento, Calif., declared Chapter 11 bankruptcy Dec. 3, according to federal court documents, blaming a cut in rates and maintenance woes.

The family-owned company, which declared Chapter 11 bankruptcy in 2015, employs 97 drivers and has 90 tractors, according to the Federal Motor Carrier Safety Administration.

Hendrickson Truck Lines logo

According to court documents, Hendrickson operates in 10 western states: Arizona, California, Colorado, Idaho, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming. The company said on its website that it sends team drivers throughout the 48 contiguous states.

The company began experiencing trouble in January, when the freight market began to soften, according to its court filing. The lower rates led Hendrickson’s customers to take bids from competitors.

Hendrickson suffered a 21% drop in rates per mile from 2018, the company claimed. As this happened, Hendrickson still was obligated to drive the same mileage, even as revenue per month fell by $400,000, according to the filing.

Through 2019, as rates dropped, about 50% of the company’s customers went to other carriers. At the same time, officials realized they had to replace much of the fleet. Hendrickson entered into an agreement with an Indianapolis leasing business for 89 trucks, with a monthly obligation of $133,000.

But the company soon found 25 of the trucks had frequent maintenance issues, leading to $606,000 in lost revenue because of downtime, $12,000 in towing costs and $182,000 in repair costs.

Hendrickson said it filed Chapter 11 to avoid complete default and liquidation, and to come to better terms with its leasing company.

Officials at Hendrickson did not return a phone message from Transport Topics.

According to its website, Hendrickson Truck Lines was founded in 1976.

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