Just a mere two weeks ago a Midwestern regional less-than-truckload (LTL) carrier ceased operations. LME posted a notice on their website on July 11th stating that they will no longer be accepting pick ups effective immediately. LME joins the five other carriers that have been major closings in 2019.
LME states on their website “Given the unfortunate situation, LME had to shut down ongoing operations. LME is presently working to finish deliveries, collect receivables and gather assets in an effort to first satisfy the obligations of our senior secured lenders, as required under our lending agreement, and to try and maximize value for all of our stakeholders.” The reasoning given according to their website is “significant operating challenges during recent times, primarily due to challenges in the trucking industry.” LME’s services included pool distribution, brokerage and logistics. They offered 100% blanket coverage in the states of Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, and Wisconsin. It has been reported that 30 terminals in several states, including the terminal located in ChemCeed’s hometown Chippewa Falls, WI, have been closed.
Truck driver Justin Patterson of Mosinee, WI told FreightWaves that he was completely blindsided by the news. He stated that he never saw this coming and that he believes management also were not aware of the situation. Another employee of LME told FreightWaves that the company was hiring in the past two weeks which he took to be a good sign and was shocked when he came to work on Thursday and learned the news. Company officials have not stated why LME stopped operations however, the company was being sued on several different fronts from a previous shutdown in November of 2016. During that shutdown LME was accused of locking out 90 union workers and laying them off from Lakeville Motor Express. The workers filed complaints stating that Lakeville Motor continued to operate as LME with cheaper, non-union labor. Just last month LME LLC began paying a multimillion settlement to those workers.
Although these settled court cases and ongoing cases may have been part of the reason that LME was forced to close operations, five other trucking companies including NEMF have closed their doors. When NEMF announced that it was filing for bankruptcy it was a shock to the rest of the industry. Thomas Connery, president and chief operating officer, attributed this to high labor costs and other costs of business in the trucking industry. Some of these costs included excessive regulation, significant toll increases, and high cost of insurance.
It seems that the smaller companies in the trucking industry are seeing costs continue to rise in a market where everyone is looking for the cheapest rate. Without any way to regulate the market closures may continue to rise.