FOX Business, January 7, 2020: At least 795 trucking companies failed in 2019, with 24,000 trucks removed from the nation’s capacity, according to Donald Broughton, principal and managing partner of data firm Broughton Capital.
In addition to the Celadon Group bankruptcy, other big companies that went under include New England Motor Freight, which employed more than 1,400 drivers, HVH Transportation, Falcon Transport and LME.
The company failures were the result of overcapacity in the market, thanks to the stellar year the industry had in 2018. When demand sagged last year, it drove prices down, making it challenging for weaker companies to continue operating.
John Kearney, president and CEO of Advanced Training Systems, told FOX Business he expects small truckers will continue to struggle and go out of business in 2020.
“The economy for the small companies is not good,” Kearney said. “Large companies are going to hurt, but they’ll be able to pull through.”
Kearney expects the spot market to remain weak, which tends to weigh heavily on smaller companies. Like last year, failures could be especially prevalent among companies with higher levels of debt.
Additionally, Kearney noted small companies will be faced with rising costs from a number of new regulations, including new requirements for training and better gas mileage.
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