NEMF files voluntary chapter 11 petition

[70mackMB]

More info at -nemf.com- under "News and Awards"   .....Hippy

[GreenGiant2]

Very sad

[41chevy]

Shevell Group is shuttering 10 freight companies, that stinks.

[Red Horse]

Thx Hippy.  Can't understand how this is happening in this economy.  You look at their equipment on road-looks good-well maintained and current.  Scrolled through their web site-very professional.  And to me, Chapter 11 is the route taken to catch your breath and reorganize.  This sounds like final objective is a complete shutdown.

I'm sure we will hear more.

[kscarbel2]

New England Motor Freight Files for Bankruptcy

Heavy Duty Trucking (HDT)  /  February 11, 2019

LTL carrier New England Motor Freight and its subsidiaries have voluntarily filed for Chapter 11 bankruptcy in New Jersey, intending to facilitate an orderly wind down of its operations.

The Elizabeth, New Jersey-based company had fallen on hard times, recording losses in consecutive years as well as “unsustainable rises in overhead,” according to Vincent Colistra, a senior managing director for Phoenix Management Services and chief restructuring officer for the company. Colistra also placed blame on a severe shortage of available drivers in the trucking industry.

Just a week prior to filing, NEMF had implemented a 5.4% general rate increase saying that it was faced with increased costs associated with regulatory mandates, insurance premiums, new equipment and technology advancements.

As a result, the company determined that Chapter 11 would be the best way to maximize the value of its assets for the benefit of its employees and various creditor constituencies.

“We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting this industry are significant,” said Colistra. “We have concluded that the Company has no choice but to proceed with an orderly wind-down of operations in a Chapter 11 proceeding.”

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[kscarbel2]

NEMF and 10 related subsidiaries declare bankruptcy

John Schulz, Logistics Management  /  February 11, 2019

It is another sad day in the trucking industry as another storied, unionized, less-than-truckload (LTL) carrier has gone under and taking tons of capacity away from shippers in the Northeast. 

In a financial development that shocked the trucking industry, 101-year-old New England Motor Freight and 10 related subsidiaries (including truckload giant Eastern Freightways) voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey in Newark on February 11.

Privately held NEMF, which competes mostly in the high-cost Northeast region, ranked last year as the 17th-largest LTL carrier in the country with revenue of just over $400 million. As a private company, NEMF did not release profit or loss numbers.

NEMF said it “intends to use these proceedings to facilitate an orderly wind-down of its operations.” NEMF was a unionized carrier, mostly covered by the International Association of Machinists and Aerospace Workers, whereas nearly all the other LTL unionized bankruptcies involved Teamsters-related companies.

NEMF’s cessation underscored the brutal nature of the thin-margin trucking industry. NEMF’s exit leaves only a handful of Northeast regional LTL carriers with significant capacity – YRC unit New Penn, Pitt Ohio, A. Duie Pyle and Ward Trucking, among them.

In an interview with LM last month, Myron P. Mike Shevell, chairman of the Shevell Group, hinted at changes when he described his freight demand as “very light right now.” But that is somewhat a normal condition for January in trucking.

“The LTL market is changing dramatically with computerization and different shippers changing modes,” the 83-year-old Shevell said. “There’s more shippers going to warehousing and shipping direct via crossdock or from the manufacturing point. That’s all changing.”

In that interview, Shevell warned, “Nobody can afford the cost of equipment sitting idle and people taking advantage of that. There’s a lot of hiccups. There are a lot of problems. There’s going to be a point where you’ll just have to wait and see.”

Vincent Colistra, senior managing director with Phoenix Management Services, and chief restructuring officer said in a statement, “We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting this industry are significant.”

Phoenix is serving as NEMF’s restructuring advisor through Vincent Colistra as the CRO. Colistra declined comment when contacted by LM.

NEMF said after two years of losses, and with “continuing and unsustainable rises in overhead” as well as a severe industry shortage of drivers, it concluded that NEMF “has no choice but to proceed with an orderly wind-down of operations” in a Chapter 11 proceeding.

Knowledgeable observers of the LTL industry said NEMF’s reliance on a few large big box retailers left it vulnerable to rate cutting in order to stay afloat.

“I am not that surprised,” Satish Jindel, principal of SJ Consulting, which closely tracks the LTL sector, told LM. He called it a “sad day” in the trucking industry as one of the industry’s grand old names was calling it quits.

“Mike Shevell built this company from the ground up,” Jindel said of NEMF’s chairman. “My heart goes out to him.”

Jindel said he didn’t think NEMF’s financial difficulties were that serious but “apparently they were,” Jindel added. Jindel took polite issue with NEMF citing “macroeconomic factors” in the LTL industry as reason for its demise.

“While they state the macroeconomic factors are significant, I believe they are not being open with what caused this problem,” Jindel said. “It is not the macroeconomic problem in the industry.”

Jindel, whose company compiles the annual Top 50 trucking lists for LM, disclosed that this year’s listing will show nearly all the top carriers have posted year over year revenue increases of 10% to 12%.

“If you got that revenue, and didn’t just your cost your freight properly, shame on you,” Jindel explained.

Privately, industry insiders said the challenge NEMF faced is what happens when it became too reliant on one or two large retail customers and must accept rate decreases in order to keep its trucks filled.

“If you let one customer get too big and that customer dictates what you have to do, that’s bad,” one industry source said. “It’s a Catch-22. You can’t say no, but if you say yes, you find yourself digging a hole.”

NEMF said only “upon the recommendation of its advisors,” it determined that a Chapter 11 proceeding was the “best mechanism to maximize the value of its assets for the benefit of its employees” and various creditor constituencies.

Besides Shevell and other NEMF employees, the biggest losers are going to be the shippers in the Northeast. They face an ever-dwindling supply of reliable, large LTL carriers. And with NEMF out of the picture, Jindel said those Northeast shippers can expect double-digit rate increases as capacity tightens.

Overall, the Shevell Group companies ranked as the 70th-largest trucking conglomerate in the country. Its units ran more than 1,550 company trucks and nearly 4,000 trailers.

The timing could favor YRC Worldwide. Not only does YRC own New Penn, one of the remaining large Northeast carriers, but it has a contract coming up covering 24,000 Teamsters that expires at the end of March.

“Here’s another union company folding—that’s not good for the Teamsters,” Jindel noted.

[kscarbel2]

Facing lawsuit, New England Motor Freight agrees to increase severance package for employees

Jon Harris, The Morning Call  /  March 4, 2019

New England Motor Freight, the less-than-truckload carrier that abruptly filed for bankruptcy and began shuttering its terminals last month, has agreed to boost the severance package for its full-time employees.

The package for 2,500 workers, approved Friday, provides up to an additional $2.7 million, a roughly 20 percent increase from the original proposal, according to Chuck Ercole, a partner at Klehr Harrison Harvey Branzburg LLP in Philadelphia and one of the attorneys representing the employees.

The settlement allows each full-time employee, union and nonunion, to get eight weeks of fully paid health care benefits and at least 14½ days of pay — up to five weeks pay if the workers had more than two weeks of unused vacation and time off, Ercole said in an email Sunday.

The larger severance package comes about two weeks after employees filed a class-action complaint against New England Motor Freight, claiming the Elizabeth, N.J., firm did not provide them with proper notice under the federal WARN Act. The law requires employers to provide workers with 60 days notice ahead of a closing or mass layoff, but hundreds of the company’s employees reported getting an informal heads-up only days before working their last shift.

That included about 200 employees at the company’s longtime terminal in Mahoning Township, Carbon County, along with 150 workers at a terminal in Cumberland County and another 100 at a Westmoreland County terminal, according to notices filed with the state Feb. 14 — a day before the closures began.

That lack of notice was at the forefront of the case brought by Klehr Harrison Harvey Branzburg, which was retained by more than 500 of New England Motor Freight’s drivers, dockworkers, warehouse workers and clerical staff. While the employees’ complaint sought eight weeks pay, the case could have dragged on for years. New England Motor Freight, meanwhile, claimed in its notice to the state that the WARN Act did not apply because the company was a “debtor in possession in liquidation under the bankruptcy laws.”

“It is a good result under difficult circumstances,” Ercole said. “Employees get money now and continued health benefits instead of waiting perhaps for years with no guarantee of success and/or whether there would be funds to pay for a larger victory.”

With the additional severance funds, the employees’ counsel is in line for up to $300,000 in court-approved attorney’s fees, according to the settlement.

New England Motor Freight, which has not returned calls from The Morning Call since its bankruptcy filing Feb. 11, provided less-than-truckload carrier services in the United States and Canada. As the term suggests, less-than-truckload services are geared toward small loads of freight, with a company such as New England Motor Freight combining the loads of several clients on its trucks to provide more cost-effective shipping.

The company had about 40 terminals throughout the Northeast, Midwest and Puerto Rico.

New England Motor Freight operated the Carbon County terminal for more than 30 years, ever since buying the assets of International Distribution Centers — formerly Interstate Dress Carriers — out of bankruptcy in September 1986.

[kscarbel2]

Estes Offers $15 Million for New England Motor Freight Assets

Heavy Duty Trucking (HDT)  /  April 29, 2019

Estes Express Lines has bid $15 million to acquire assets the Eastern Freight Ways and Carrier Industries divisions of New England Motor Freight, according to recent reports.

The bid is part of NEMF’s chapter 11 bankruptcy proceedings, stemming from the LTL carrier’s decision to file for bankruptcy in early February. A decision on the $15 million bid will be made on May 16.

The New Jersey-based company stated that it had recorded losses in consecutive years and the damage was compounded by unsustainable increases to overhead.

The company determined that chapter 11 bankruptcy was the best way to maximize the value of its assets for the benefit of its employees and creditor constituencies.

For Estes Express, the acquisition would bolster the company’s flatbed truckload business. Estes is based in Richmond, Virginia, employing over 8,100 drivers with 6,700 vehicles and over 27,400 trailers.

 

[Maddog13407]

no one has stated that the greedy lazy grandson of the owner of NEMF that was in the hospital at the time the lazy kid decided that''he doesn't wanna work for a living'' and files bankrupy and coincidentally all their restored old trucks are in someone elses name.....

[GreenGiant2]

Anyone hear an auction date yet?