Carrier Bankruptcies Make 3PLs More Important to Shippers than Ever

September 11, 2019 by Meyer Baron
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In 2017, New England Motor Freight (NEMF) generated $402 million in revenue. On February 12, 2019, NEMF, the country’s 19th largest LTL carrier, shut down operations and announced that it was filing for bankruptcy protection. 1,472 truck drivers were out of work in the largest U.S. trucking company shutdown since Consolidated Freightways in 2002.

First in a Rash of Carrier Bankruptcies

The NEMF bankruptcy rocked the freight-shipping industry, but it turned out to be just the first (and largest so far) in a rash of carrier bankruptcies in 2019. As of July 31, seven trucking companies have filed for bankruptcy, leaving upwards of 2,500 drivers plus administrative and field support personnel out of work.

While NEMF was a very large carrier, the other six that shuttered their businesses ranged in size from Starlite Trucking (28 drivers) to Falcon Transport (585 drivers).

Impact on Shippers

Each closing abandoned an untold number of shippers that had contracts with that carrier and left them scrambling to find a new carrier. It’s hard to imagine that they ended up paying less for service with a new carrier.

3PL’s to the Rescue

Hopefully, those shippers who were left high and dry by the bankrupt carriers had the sense to turn to an experienced 3PL (freight broker) with a large network of carriers to handle their freight shipping and did not sign a direct contract with another individual carrier.

If your business can meet a carrier’s minimum shipping requirements, a long-term contract can be very alluring. But if the carrier goes under or starts providing substandard service, you’re screwed.

That’s why partnering with a 3PL like FreightCenter is the smarter way to go. We have active contracts with more than 45 LTL carriers. If one of them should go under or fail to produce, it doesn’t slow down our customers in the least. For Full or Partial Truckload shipments, we have hundreds of Truckload carriers and independent operators all over the country at our disposal.

When dealing directly with a carrier, the key is your contract. That’s all you have to rely on.

When partnering with a 3PL, there are several keys, including:

  • Experience | A startup 3PL may not have the relationships or resources to help you in a time of need
  • Network | You need to be sure that the broker’s network can handle all of your needs, even in an emergency
  • Status | If you’re an SMB and your 3PL deals primarily with enterprise-level shippers, it’s unlikely that you will be very important to them
  • People | Having access to shipping experts and the ability to build a relationship with them can make all the difference in being a successful shipper

FreightCenter stands out in all of these areas. We’ve been serving SMB shippers for more than 20 years, with an impressive network of truck carriers that covers the entire U.S. and Canada. We want to be your shipping partner and our staff of in-house shipping experts are ready to help.

Getting ready to ship? Start with a free online quote or give us a call at 800.716.7608.

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