Why did Fikes Truck Line go down?

By Clarissa Hawes, staff writer

Rumors had been swirling in the trucking industry in early May that Fikes Truck Line of Hope, Ark., was experiencing cash flow problems and was selling out to a larger carrier.

In May, Fikes’ Chairman and Chief Executive Officer Gary Salisbury set the record straight.

Salisbury confirmed to Land Line that Fikes is closing its doors, but is not selling its assets to another company, Blair Logistics of Birmingham, Ala. He said recruiters for Blair have been contacting Fikes’ owner-operators and company drivers about transitioning over to Blair.

Blair will operate out of the same terminal in Hope, Ark., as Fikes did. Salisbury said some of the folks are staying on to work for Blair. “I felt it was very important to talk to the same people, same dispatcher, same safety people they have been talking to for the past 30 years,” he said.

One of those people is former Director of Recruiting and Contractor Services Max Campbell, a man well-known in the trucking community. Campbell announced on Facebook that he would be working for Blair.

Owner-operators leased to Fikes started calling the Owner-Operator Independent Drivers Association’s Business Services Department in early May, claiming their paychecks bounced. Some have since been paid, but Salisbury said there is no set date as to when all drivers will be paid money they are owed.

Salisbury said he blames the recession, as well as his company losing sight of the true value of the business – its people – as the main causes of Fikes’ demise.

“I tried not to get pushed, to get pressured by the industry, but we made some mistakes in 2009 and 2010 when we were trying to recover from the recession,” Salisbury said. “I think what happened to Fikes is we got into the freight business and we got out of the people business.”

Fikes was a member of The Trucking Alliance, a group – J.B. Hunt, Knight, Maverick and Boyle and Dupre Logistics – that supports an electronic logging mandate, hair testing, speed limiters, increasing the minimum insurance for trucking companies and other regulatory measures. All are issues opposed by owner-operators.

Some owner-operators leased to Fikes say they had an inkling the company was in financial trouble in early February when their checks didn’t clear.

One OOIDA member from Ohio said he is owed nearly $6,000 from Fikes. Even though he had not been paid for two weeks, the flatbedder told Land Line he went ahead and delivered his loads.

“I had customers on both ends of this deal; it wasn’t their fault,” he said. “I went ahead and delivered their loads so my customers’ people would still have a job.”

An OOIDA member from Louisiana – who was owed nearly $12,000, including nearly $7,000 in his maintenance escrow – told Land Line in May that he has been paid all but $200 he is owed.

Salisbury credits the professionalism of Fikes’ owner-operators who continued to work despite not getting paid.

“It’s hard to believe that they are out there working and we owe them money,” he said. “We are going to get them paid.”

FTL Custom Commodities, a sister company to Fikes, will continue to operate. Its parent company, FTL Transport Services Inc., will operate as well.

In February, Zurich American Insurance Co. filed a lawsuit against Fikes over its workers’ compensation and employer’s liability insurance policy.

According to court documents, Zurich claims Fikes owes the company $146,646 for coverage that began on March 1, 2013, and ended on March 1, 2015. Court documents allege Zurich conducted an audit on the policy in May 2014 and determined that Fikes owed an additional $68,207. In July 2014, Zurich sent another invoice in the amount of $78,439 for the policy’s second year.

“That was a problem that was caused by our cash flow issue,” Salisbury said. “We owe them (Zurich) money, but we don’t owe them that amount. It’s getting settled.”

The biggest lesson Salisbury said he has learned about the trucking industry over the past 34 years is a simple one: “Take care of your people.”

“We are trying to make this as soft of a landing as possible,” Salisbury said. “What I have learned is that you are really not in the freight business; you are in the people business. If you take care of your people and take care of your contractors, they will take care of your freight.”

On Facebook, drivers for other companies weren’t shy with comments, blaming capacity and politics.

Driver Tim Sharp posted “I hate to see an old carrier go down but … endorsing e-logs and embracing 65 mph for trucks all the while employing owner-operators was insane.”

Mickey Murphy, another non-Fikes driver, posted “when a company tries to grow too fast and get into the politics of the industry, this is the kind of thing that happens.” LL