After 96 years in business, Waco, Texas-based less-than-truckload (LTL) carrier Central Freight Lines is closing its doors.
Central Freight announced that it is winding down its operations and as of Dec. 13 has ceased picking up new shipments. The carrier expects to deliver substantially all freight in its system by Dec. 20.
Central Freight Lines generated $262 million in revenue in its most recent fiscal year, company President Bruce Kalem told The Wall Street Journal. Despite an influx of cash from its owner and chief executive, Swift Transportation Co. founder Jerry Moyes, the business incurred a loss of $67 million last year, the latest in a string of losses that totaled roughly “a quarter-billion dollars in the past years,” the Journal reported.
Central Freight stated in a press release that it is in discussions with key customers and vendors and expects “sufficient liquidity to complete deliveries over the next week in an orderly manner.”
"We make this announcement with a heavy heart and extreme regret that the company cannot continue after nearly 100 years in operation,” Kalem 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."
According to data from the Federal Motor Carrier Safety Administration (FMCSA), the carrier employs 1,325 drivers and has 1,602 power units. Central Freight Lines ranked No. 80 on the 2021 FleetOwner 500 top for-hire fleets list.
In the Dec. 13 statement, Kalem noted that the company had explored all available options to keep operations going. However, operating losses sapped all remaining sources of liquidity, and the company's liabilities far exceed its assets, all of which are subject to liens in favor of multiple creditors.
Despite its efforts, Central Freight was unable to gain commitments to fund ongoing operations, find a buyer of the entire business, or fund a Chapter 11 reorganization.
“Given its limited remaining resources, the company concluded that the best alternative was a safe and orderly wind-down,” Kalem said. “As we complete the wind-down process, our primary goal will be to offer the smoothest possible transition for all stakeholders while maximizing the amount available to apply toward the company's obligations.”
Kalem added that Central Freight is in negotiations to sell a substantial portion of its equipment. The company also 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," Kalem said.
Central Freight Lines was founded in 1925 when W.W. “Woody” Callan Sr. bought a Model T and drove from Waco to Dallas to pick up some goods for a Waco merchant, thus starting Central Forwarding and Warehouse company.
