Consolidated Freightways closes doors, 20 out of work

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In an ironic turn of events, Consolidated Freightways Corporation announced on Labor Day that it would file for bankruptcy and eliminate more than 15,000 jobs around the country. |ret||ret||tab|

The 73-year-old North American trucking company, based in Vancouver, Wash., filed Chapter 11 bankruptcy and shut down operations Sept. 3, leaving 20 employees jobless at CFC's Springfield terminal. While it's a small number, the announcement hit hard with Rod Gilbert, manager of the terminal at 2930 E. Kearney St.|ret||ret||tab|

"We have ceased operations effective Monday (Labor Day)," Gilbert said. "I'll do everything I can to help them find good jobs because this is the finest bunch of people I ever worked with. I, too, have plans to look for a job."|ret||ret||tab|

Gilbert said his 13 drivers were members of Teamsters Local 245.|ret||ret||tab|

The announcement of a less-than-truckload carrier filing bankruptcy comes as no surprise to Prime Inc. spokesperson John Hancock. But there is a lesson to be learned, he said, seeing one so large and with such a long history succumb to the industry's troubles.|ret||ret||tab|

"In business, size and longevity are not guarantees of success," Hancock said. "Nobody is above having to run a good business."|ret||ret||tab|

Less-than-truckload carriers haul cargo for multiple businesses on the same load. Truckload carriers haul a single company's shipment per truck.|ret||ret||tab|

APT Transport Inc. General Manager Craig Gracey sees it as an opportunity to acquire some of CFC's shipping business. |ret||ret||tab|

"It opens some opportunity for us," Gracey said. "They were in the door to a bunch of places we weren't able to get in. Now we'll have a chance to get some of that business."|ret||ret||tab|

APT is a less-than-truckload carrier with around 100 employees and headquarters in Springfield. It serves 48 states.|ret||ret||tab|

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Tough times|ret||ret||tab|

In recent years, trucking has been a tough business for both the less-than-truckload carriers, like CFC and APT, and the truckload carriers, like Prime. Forces such as increased insurance premiums, higher fuel costs and a downturn in the economy have led to struggling transportation companies.|ret||ret||tab|

Hancock said less-than-truckload carriers are typically seeing only a 1 percent or 2 percent profit margin. |ret||ret||tab|

"(Prime is) at 10 percent and think we're dying," he said. "I've been looking at these less-than-truckload (carriers) for the last few years and seriously wondering how they make it." |ret||ret||tab|

For instance, United Parcel Service, the nation's largest less-than truckload transportation company, did $30 billion in business last year and netted $2.4 billion, according to Commercial Carrier Journal, an industry publication. |ret||ret||tab|

Others in the less-than-truckload industry also had low profit margins last year: Yellow Freight did $3.2 billion and made $15 million; and Roadway Express did $2.7 billion and made $30 million.|ret||ret||tab|

CFC had revenues of $2.2 billion and lost $104 million.|ret||ret||tab|

Consolidated Freightways reported second-quarter 2002 revenues of $482.4 million and a net loss of $123.2 million. A company news release said CFC's board of directors determined the company couldn't continue at that pace without additional financing, which it could not obtain. |ret||ret||tab|

Last month, a surety bond that secured the company's workers' compensation and vehicular casualty insurance was cancelled, leading the company to believe that additional bonds also would be cancelled, a company release stated. |ret||ret||tab|

"I don't think there is anything crooked going on," Gilbert said. "It was just bad management. We weren't lean and trim enough."|ret||ret||tab|

CFC had been struggling for the last couple of years, but appeared to be rebounding under new Chief Executive Officer John Brincko. |ret||ret||tab|

Brincko, who managed turnarounds for Sun World International Inc., Barney's New York, Mossimo Inc., Globe Security and Stroud's, was hired May 28.|ret||ret||tab|

Positive signs for the company earlier this year included new or re-signed contracts with the U.S. Postal Service, Genlyte Thomas, Mail-Well Inc., Home Depot, Pliant Corp. and Siemens Corp.|ret||ret||tab|

Gilbert noticed a difference. "We'd been struggling for a long time, but lately it's picked up a whole lot," he said. "It was just too late."|ret||ret||tab|

CFC subsidiaries CF AirFreight, Canadian Freightways Ltd. and Grupo Consolidated Freightways will continue to operate as usual.|ret||ret||tab|

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