Thousands of truck drivers suddenly found themselves jobless -- many of them stranded midroute -- after Celadon Group abruptly filed for Chapter 11 protection Monday and halted operations -- just days after two former executives were charged with securities fraud.
"So every company driver and owner operator lost our jobs today without being notified about the closing of the doors of this mega company," one driver, Roderick Orr, posted on Facebook Monday. "A lot of people I know are stuck all around the country trying to get home and look for another job please pray we all bounce back."
Indianapolis-based Celadon is one of the biggest truckload carriers in North America, with nearly 4,000 employees and a fleet of roughly 3,300 tractors and 10,000 trailers. Its clients include major corporations like Walmart, Honda Motor Co., Procter & Gamble and Philip Morris International.
Celadon took in more than $1 billion in revenue as recently as 2015, but the company has been struggling amid an industry downturn and an accounting scandal that prosecutors say cost shareholders more than $60 million. The filing is the largest trucking bankruptcy in history. The company cited $427 million in assets and $391 million in debts as of Dec. 2.
"We have diligently explored all possible options to restructure Celadon and keep business operations ongoing, however, a number of legacy and market head winds made this impossible to achieve," Chief Executive Paul Svindland said in a news release. "Celadon has faced significant costs associated with a multiyear investigation into the actions of former management, including the restatement of financial statements. When combined with the enormous challenges in the industry, and our significant debt obligations, Celadon was unable to address our significant liquidity constraints through asset sales or other restructuring strategies."
Celadon was founded in 1985 by Steve Russell, a former executive with Ford, RCA Corp., and Hertz Truck and Equipment Corp., with 50 leased trucks and 100 leased trailers. It became one of the first U.S.-based companies to forge routes into Mexico.
Employees had been asked to attend a meeting Monday at company headquarters after word of the bankruptcy filing emerged last week. The company began advising its biggest customers about the bankruptcy plan as early as Friday, FreightWaves reported, but drivers were not notified until Sunday night, when the company messaged them on their telematics devices. The dispatch offered few details and little guidance for newly jobless drivers, who were left to figure out what to do with their rigs, which they live in for most of the year, and how to get back to their real homes, the report said.
"We will have more information in the morning as to where equipment needs to be returned to," the message obtained by FreightWaves read. "We have been assured that everyone who follows instructions will be paid for the work and miles assigned and completed, and Celadon will not leave anyone stranded away from home."
Social media posts paint a picture of chaos: Drivers' fuel cards were shut off over the weekend, leaving them without a means of filling their rigs' hundred-gallon tanks, which can cost upward of $500 to gas up. Some said on Facebook that TravelCenters of America was refusing to do repairs or give roadside assistance because the company's maintenance account was closed, according to FreightWaves, and there was no way to get authorization for repairs.
Drivers were given conflicting information about what to do with their loads and trucks. Other carriers drivers' saw Celadon trucks being repossessed and towed from truck stops, FreightWaves reported.
Drivers and their families expressed frustration about being left in the lurch during the holidays. They asked for advice about how to get home and worried about the sudden loss of income.
"We will ride this storm out and find the rainbow on the other side but it's terrifying not knowing if we can pay our bills," Carissa Logan Harden, whose husband lost his job Monday, posted on Facebook. "We were lucky enough to have purchased all of the kids Christmas gifts already so they will not miss a beat there but it's also tough to tell them that their everyday experiences may change or go away."
The U.S. has been grappling with a shortage of truckers. An additional 51,000 are needed to meet demand for big companies like Amazon and Walmart, according to the American Trucking Associations. The shortage is already causing delayed deliveries and higher prices for goods. Now, rival carriers are rushing to scoop up newly laid-off Celadon drivers, offering free bus tickets and legal advice to those stranded.
"We are committed to matching or exceeding your existing pay package for a like job or route and many of our open jobs come with a generous sign-on bonus as well," Dave Ables, chief executive of Dart Transit Co., said in an open letter to Celadon drivers. "At the end of the day this is a very tough situation for everyone and we at The Dart Network are here to support the driving community. Whether you are able to work for us or not is secondary to the primary goal of getting you off the road and to your desired location as quickly and safely as possible."
Other companies in the trucking world, like TravelCenters of America, which operates service centers and convenience stores, encouraged their employees to help stranded truckers if they could.
"If you see a driver stranded or in need of assistance, do what you can to make them comfortable," Rodney Bresnahan, executive vice president of TravelCenters of America, said in an email to employees. "Whether it is a meal, shower, cup of coffee or a phone call to assist with arranging a bus ticket, please do the right thing."
Business on 12/11/2019