Yellow | New Century Transportation Files For Bankruptcy!

Hybrid LTL carrier New Century Transportation shutting down

William B. Cassidy, Senior Editor | Jun 10, 2014 12:30PM EDT


Unable to secure financing needed to keep its trucks rolling, New Century Transportation is preparing to close its doors after 14 years in the less-than-truckload business and file for bankruptcy protection.

News of the pending closure — the biggest to hit trucking since the collapse of Arrow Trucking in 2009 and Jevic Transportation in 2008 — leaked out yesterday as employees began receiving mailed notices of an “expected permanent shutdown” from New Century CEO Terry Gilbert. The notice also said the company’s management had attempted to sell the company. The companyposted an “employee assistance” page on its website July 10, but no information of a pending shutdown or bankruptcy filing. However, word of the shutdown spread rapidly through social media, and as copies of the notice were posted to the truckingboards.com website. By late yesterday, several logistics and trucking industry sources familiar with New Century confirmed the company is preparing to shut down and had been up for sale last week.

Companies such as truck broker Rapid Express Freight in Monsey, New York, are already handling shipper queries about how the loss of New Century will affect their business. “We here at Rapid Express Freight are sad to see New Century Transportation shutting down,” the firm said on its website. “We want to assure our customers that we are having no disruption in service due to New Century Transportation shutting down.”

Other carriers are reportedly helping New Century complete delivery of freight within its system.

The sudden collapse of New Century comes as freight volumes and rates are rising and shippers are working harder and longer to find trucks. New Century had a fleet of 916 tractor-trailers and 910 drivers, according to the latest company information filed with the Federal Motor Carrier Safety Administration. The Internet is literally swarming with companies trying to hire those drivers. Competing motor carriers are soliciting drivers directly on New Century’s Facebook page. A report in the Gannett Courier-Post today had recruiters onsite talking with drivers waiting for information outside New Century headquarters.

According to the employee notice, New Century will file for Chapter 7 bankruptcy protection from its creditors. The notice stated “the unforeseeable need to shut down operations” arose when an unnamed lender “unexpectedly declined” to fund ongoing operations. “NCT immediately took steps to seek financing and other alternatives, including a sale of all or part of the company,” the notice said.

Those efforts, as of June 9, had been unsuccessful, and employees were told they would be let go within 14 days. “NCT reasonably believes that it could not have provided earlier advance notice of the shutdown because such advance notice would have precluded NCT’s ability to secure alternative funding or a sale of the company,” the notice said. The notice did say that because “the situation is currently in flux,” some employees might be retained for some time by a Chapter 7 trustee.

The sudden collapse of New Century will create opportunities for other LTL carriers, especially those in the Northeast, and headaches for shippers that relied on its unique load-to-deliver LTL service. “New Century is the type of carrier that when they went into an account, they owned an account,” said Ed Burns, president of Burns Logistics Solutions, a transportation sales agent in Mohrsville, Pennsylvania.

Privately owned New Century, which had about $145 million in revenue in 2013, was the 24thlargest LTL carrier in 2013, according to SJ Consulting Group. The company was founded in 2000 by Harry Muhlschlegel, who pioneered the load-to-deliver model at Jevic Transportation, which shut down in 2008. Muhlschlegel sold Jevic to Yellow Corp. in 1999 and then started New Century. He retired in 2012.

That “load-to-deliver” model, which eschews traditional LTL hub-and-spoke terminal networks and thrives on heavier-weight partial truckload shipments delivered direct to consignees, is becoming more difficult to maintain in today’s trucking marketplace, said Satish Jindel, president of SJ Consulting.

“It was a neat concept that worked for many years for Muhlschlegel, but it’s applicable to a limited, niche kind of shipment,” he said. “In the kind of market we are in now, it’s challenging for anyone trying to follow this model. They’ll have to be extra cautious about how they operate.” The driver shortage squeezing truckload carriers would pinch New Century as well, Jindel said, thanks to its longer lengths of haul. More traditional LTL carriers are taking heavier shipments, as is apparent in quarterly tonnage figures, and their drivers typically are home every night, an advantage for other LTL carriers, he said.

Jindel and other industry sources said New Century, while well respected for its service, had been struggling financially for some time. New Century was one of only two of the Top 25 LTL carriers whose revenue declined in 2013, the other being YRC Freight. New Century’s revenue dropped 4.5 percent last year after increasing 4.1 percent in 2012, according to SJ Consulting.

Gilbert joined the company in 2012 as CEO and brought in Mark Olszewski as president in 2013. Both had long careers with Roadway Express. “Terry is a very well experienced, capable person, but the damage was already done before he got there,” Jindel said.

Contact William B. Cassidy at [email protected] and follow him on Twitter: @wbcassidy_joc.
 
What? Mark Olzewski, formerly with Roadway Express, the man with the disposition of a rattlesnake, who seemed to walk around all day with a tablet, writing down notes, had no comment? Wow !

It's not that he didn't have a comment, just that his phone was already turned off........................:LMAO:
 
Comodeway mgt had another flush.dang I thought they were better than yellow snow mgt.about the same looks to me
 
-15% at a YRCW company is a lot better than the zero they're getting now isn't it?

Not really , cause for one they get unemployment checks for about $360 - $400 a month and PLUS now they can go back to school and get paid for it , cause any time a company shuts down , you can get free grants to go to school and learn new job skills !!!
 
-15% at a YRCW company is a lot better than the zero they're getting now isn't it?

You mean 15% of the current 85% that yrc employees are no enjoying! Which is 70% of the NMFA rate which is about $17.00 an hour for new hires. And they wonder why they can't get good help.
 
You mean 15% of the current 85% that yrc employees are no enjoying! Which is 70% of the NMFA rate which is about $17.00 an hour for new hires. And they wonder why they can't get good help.

You better take a refresher math course. 85% of 85% of the full rate is not 70% of the full rate. I'll let you try to come up with the accurate number.
 
Top