Truckers left without pay as Trucker’s Express brokerage shuts down

| Friday, April 06, 2007

Micki Ball contracted with Trucker’s Express Inc.’s brokerage service to haul a load from Aurora, IL, to Jacksonville, FL, for $2,200 in early December.

One week later, Ball got a phone call from her factoring agent – the service had downgraded Trucker’s Express and placed them on its no-load list after finding out the company had tens of thousands of dollars in outstanding load payments to other carriers.

Ball, who co-owns Ball Carriers LLC with her husband, Wade, did some digging and found that the Department of Transportation had yanked Trucker’s Express’ operating authority three times in the previous three years.

“If I’d seen that I wouldn’t have taken that load,” Ball said.

The Missoula, MT-based company officially closed its doors Feb. 26, leaving many carriers without payment for loads hauled during the past several months.

The Owner Operator Independent Drivers Association has taken reports from more than a dozen drivers who reported they haven’t been paid by Trucker’s Express, Inc.

Several phone messages Land Line left at Trucker’s Express headquarters weren’t returned, but a recording on the firm’s phone line bluntly describes the company’s demise:

“As you know, TEI ceased ongoing operations on Feb. 26. We are now working on a windup of our business and liquidation of our assets. We have the support of our major secured lenders and we are now proceeding rapidly to obtain the maximum recovery for the benefit of our creditors. We will communicate with you as soon as we know more. Realistically, that will be within 30 to 45 days.”

RTS Credit Services of Lenexa, KS, rates brokers for carriers and drivers that subscribe to the service, said Randy Gunderman, the company’s marketing director.

RTS downgraded its rating of Trucker’s Express in October when it was discovered that the broker’s average length of pay time slip from 32 days to 72, Gunderman said.

Before October 2006, RTS tracked 1,010 experiences between Trucker’s Express Inc. and RTS clients, and Gunderman said the company was recommended to carriers.

“Just because somebody slows down in pay doesn’t mean they’re going out of business but it sure ain’t a good sign,” Gunderman said. “They were very big; they had lots of loads.”

Brokers are required to post a $10,000 bond designed to insure carriers don’t get cheated out of payments, Gunderman said. Unfortunately, he said, by the time claims are made for the bond, a long list of carriers are usually in line for the same money.

“It protects the first five people in line and the next 250 get busted,” Gunderman said. “They’re in excess of hundreds of thousands of dollars on this $10,000 bond.”

OOIDA has petitioned the Federal Motor Carriers Safety Administration to raise the required bond above $10,000, though the agency hasn’t issued a new requirement.

Trucking firms historically have failed due to high oil prices and soft demand for transportation, said Donald Broughton, senior transportation analyst for the AG Edwards & Sons brokerage firm.

Trucking companies that offer both brokerage and its own over-the-road services, such as Trucker’s Express once offered, tend to be more stable, Broughton said.

“When we see oil go up and demand goes down, that’s the fatal combination,” Broughton told Land Line. “Usually having both hard assets and a broker situation improve their financial ability and the ability of a company to manage through a cycle … they usually complement each other.”

The U.S. Department of Transportation’s SafeStat Web site showed that at the time of the agency’s last inspection, Trucker’s Express had 369 power units and had deficient scores for driver safety.

Boise Boys Inc. has two drivers and owns two trucks, said Tracy Fries, who owns the company with husband, Chris Fries. Fries’ company was stuck with $5,600 for two loads, one booked and made in early December and another booked in late January.

Missing two payments won’t destroy Boise Boys, Fries said. Smaller owner-operator businesses, however, could be wiped out after being stiffed for only a few loads.

“I understand things happen but you don’t turn your back and let other businesses take care of your obligations while letting your debts go,” Fries said.

“Eventually,” she said, “somebody is going to pay me.”

– By Charlie Morasch, staff writer
charlie_morasch@landlinemag.com

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