By Clarissa Kell-Holland
In December 2009, OOIDA Member Larry Comby of Philadelphia, MS, found himself without a job when his company, Tulsa-based Arrow Trucking, suddenly collapsed. He and countless other drivers and employees were left out in the cold.
However, Comby told Land Line recently that he felt fortunate to have found another trucking job so quickly. Within a few weeks of Arrow Trucking’s closure, he went to work with C. Bean Transport Inc. of Fort Smith, AR.
Then in mid-March, Comby received bad news that again he was going to be out of a job after C. Bean announced it was permanently closing its doors because of financial difficulties.
“I am kind of wary to sign on with anyone else at this point, but trucking is what I know and what I have been doing for more than 30 years,” he said. “What I find interesting was that C. Bean recruited me and other drivers to come work for them after Arrow (Trucking) closed. We didn’t think twice about going with them because Bean had a good reputation and we had just been though hard times with Arrow (Trucking).”
In 2010, both flatbedding operations have filed for bankruptcy protection – Arrow Trucking filed for Chapter 7 bankruptcy protection in January, and C. Bean filed for Chapter 11 bankruptcy protection in March after defaulting on a $5.6 million loan.
Unfortunately, the fact that companies continued to fail during the first quarter of 2010 wasn’t necessarily unexpected. And, according to one analyst, there are a couple of reasons.
Donald Broughton, senior research analyst for Avondale Partners, predicted in his 2009 fourth quarter “Trucking Failure Report,” that company failures would actually “accelerate” in the first quarter and that more trucking bankruptcies could be expected.
He noted that heading into 2010, there were still motor carriers that had exhausted their equity, their cash and their lines of credit.
Couple the lack of financial resources with the condition of their equipment, and Broughton said that put those companies “only one severe accident or a few breakdowns away from not being able to make payroll.”
Adding to the money pinch, many had licensing and insurance premiums due in the first quarter as well.
And, with many trucking companies’ finances on life support, the potential of banks stepping in also changed with the new year, according to Broughton.
During a large chunk of 2009, lenders were apprehensive about repossessing equipment. There simply wasn’t a resale market for it. That wasn’t the case once the calendar year ticked over to 2010. Banks and lenders began to repossess the collateral on loans – effectively putting companies like Arrow Trucking out of business.
Although Broughton had not issued his first quarter report as of press time, many economic indicators were starting to point toward better days.
Nevertheless, the reality of recession-era trucking has left its mark on many in the industry.
Comby admits that while times have been tough, he’s already started the process of looking for another job in the trucking industry. He hopes to find one that’s more financially stable than the previous two companies he’s signed on with in recent months.
“Hey, who knows? Maybe the third time’s a charm,” he joked while waiting at the bus station in Arkansas to take him back home. LL