The Great Freight Recession has hampered the trucking industry over the last four years with reduced shipping demand, lower freight rates, and rising costs of labor, fuel, and insurance driven by inflation.
And then, oil prices surged after the Iran conflict began in late February.
Diesel hits $8 a gallon
As a result of a spike in oil prices, the trucking industry is facing a huge fuel cost increase. The average price of diesel in California reached $7.77 per gallon, according to AAA, with some stations charging over $8 a gallon, KOVR-TV in Sacramento reported on April 7.
The cost to fill a single truck tank can cost from $1,400 to $1,600, according to some drivers, the report said.
The average cost of a gallon of California No. 2 diesel was $4.65 a gallon in January and $4.87 in February, according to the U.S. Energy Information Administration.
Price almost doubles
“We’ve almost doubled the cost in about a month and a half,” Raman Dhillon, CEO of the non-profit North American Punjabi Trucking Association, told KOVR.
The increased fuel costs since Feb. 28 might be the last nail in the coffin for many smaller trucking companies that are unable to include fuel surcharges in their shipping contracts. Larger companies, such as Amazon, UPS, and FedEx, include surcharges on deliveries to offset higher costs.
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National Road Logistics files bankruptcy
A combination of rising costs and legal issues has forced National Road Logistics LLC to file for Chapter 11 bankruptcy.
The North American trucking and logistics company filed for bankruptcy protection on April 6, citing rising debt obligations that needed to be brought under control. The company also faced legal disputes, which are now subject to an automatic stay while the bankruptcy case proceeds.
The Signal Hill, Calif.-based trucking company filed its petition in the U.S. Bankruptcy Court for the Central District of California in Los Angeles, listing $1 million to $10 million in assets and $10 million to $50 million in liabilities, according to Bankruptcy Observer.
Debtor has over $43 million in liabilities
National Road Logistics listed over $43 million in secured and unsecured debts in its petition, according to Bondoro.
Unsecured claims include Sunshine Distribution, owed over $14.5 million in breach-of-contract claims; Nordstrom, owed $9.5 million related to a lease claim; Prologis Management, owed $8.3 million in vendor-related claims; Milestone Equipment Company, owed over $6.5 million in vendor leases; and McKinney Trailer Rentals, owed over $1.1 million.
The company also faces other unsecured vendor payables and breach-of-contract claims.
The company has about $7.5 million owed on secured claims and about $1.6 million in assets.
National Road Logistics operates 27 trucks and employs 35 drivers for the interstate and cross-border shipping of general freight and intermodal containers, according to the Federal Motor Carrier Safety Administration’s SAFER website.
Company operates nationwide
The company has a national presence with warehouse facilities and a 6-acre storage yard in Torrance, Calif., and operations in Newark, N.J., Savannah, Ga., and Houston.
National Road Logistics‘ Southern California facilities are located just minutes from Los Angeles International Airport, the Port of Los Angeles, and the Port of Long Beach, according to its website.
National Road Logistics unsecured claims
- Sunshine Distribution, owed $14.5 million.
- Nordstrom, owed $9.5 million.
- Prologis Management, owed $8.3 million.
- Milestone Equipment Company, owed $6.5 million.
- McKinney Trailer Rentals, owed $1.1 million.
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