Makena Trading Corp. of Pembroke Pines, Florida, doing business as Makena Express, filed its bankruptcy petition with the U.S. Bankruptcy Court of the Southern District of Florida on Monday, April 10. Company President Guillermo Gutierrez claimed the pandemic continues to make revenues decline.
Makena Express earned almost $2.3 million in 2022. The bankruptcy case's summary put the carrier's gross revenues from Jan. 1 until its bankruptcy filing date over three months later at nearly $290,000.
The trucking company now owes $9,100 in back wages – $5,600 to 10 independent truckers and $3,500 to one W-2 employee.
The petition listed both the company's assets and liabilities at between $1 million and $10 million. The filing also included that it has up to 49 creditors and maintained that funds will be available for distribution to unsecured creditors once it pays administrative fees.
The court documents indicate that the company's creditors are owed more than $810,000. The company also owes the U.S. Small Business Administration $150,000 for a business loan and has a blanket lien on all of its assets, which the trucking firm disputes.
A status hearing on the carrier's Chapter 11 case is scheduled for May 3.
According to the FreightWaves National Truckload Index, last year has been an extension of the red-hot market conditions of late 2020 and 2021, with spot rates declining by 27.6 percent in 2022. In the contract market, which comprises a larger chunk of the trucking industry, the rate to move a truck declined by six percent over the same period.
One of the largest trucking companies that filed for bankruptcy in 2022 was Illinois-based Marvin Keller Trucking, which employed 115 drivers. The company's president said it was unable to keep up with rising operating expenses. Market conditions and the payment of a $10 million decision during a case in which a Martin Keller truck driver killed a passenger driver in a collision further strained the company's finances.
Another logistics company that closed down last year was Vermont-based LandAir, which employed 135 drivers. It filed for Chapter 7 bankruptcy last July. Company leadership reportedly lied to truckers by claiming before the shutdown that the business was flourishing. Corbel Capital Partners, owner of LandAir, decided to close the trucking company because of rising operating costs and low rates on investment returns.
The Mississippi-based UFI Transportation, which employed 213 drivers, shut down on Nov. 21, 2022. Truckers were told to forego completing their ongoing deliveries and to immediately return all equipment, inventory and delivery documents.
Lastly, many of the largest carriers that contract the U.S. Postal Service's operations also filed for bankruptcy. These include Matheson Postal Services, which employed 383 drivers. The company filed for Chapter 11 bankruptcy on May 5.
Rachel Premack and Clarissa Hawes, writing for FreightWaves, note that the shutdown of trucking companies has become a boon for the Post Office, which has long struggled to manage costs with limited revenues. But the Post Office's modernization programs, including one key initiative to pay carriers per mile rather than through a set contract payment, has allowed it to stay afloat. (Related: Freight companies expect "muted peak season" due to waning retailer demand.)
SupplyChainWarning.com has more news on the collapsing logistics networks of the United States.
Watch this episode of "Liberty and Finance" as host Dunagun Kaiser interviews a trucking industry insider about looming commodities shortages caused by the collapse of the trucking industry.
This video is from the Liberty and Finance channel on Brighteon.com.