- Comcar, which employed nearly 1,000 truck drivers, has filed for Chapter 11 bankruptcy.
- The company will sell off its trucking firms, avoiding the chaos that came when truckload giant Celadon went bankrupt late last year.
- Still, Comcar’s employees may be at risk for losing their jobs.
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Scores of trucking companies went bankrupt last year, prompting some truck drivers to refer to 2019 as a “bloodbath”
On May 17, the $800 billion saw its first major bankruptcy of 2020: Comcar, a holding company for four trucking transport companies and one truck repair and parts distribution firm.
Comcar announced Sunday that it would sell off all five of its national transportation companies in its Chapter 11 filing. Comcar management said it will conduct daily business activities as usual until the firm shutters, and that they will manage the sell-off process with supervision by the bankruptcy court.
That should relieve Comcar’s employees, which number more than 2,000. Of those workers, federal data says 949 are truck drivers.
Comcar appears to be designing it bankruptcy and sell-off proceedings to bypass the chaos that sometimes arises during a trucking bankruptcy. In those situations, firms will suddenly shutter. Truck drivers will then find themselves suddenly jobless and potentially saddled with giant trucks.
The bankruptcy of Celadon, which filed for Chapter 11 in December, left nearly 3,000 truck drivers suddenly jobless. Some were stranded on the road with no clear way of getting back home.
“Our decision to file Chapter 11 was to better enable us to find homes for our customers, people and assets,” the Comcar senior management team said in a statement. “Prior to this decision, we worked diligently to find a solution that would reduce our debt, enhance our liquidity, and best position all Comcar holdings for the future.”
Still, Comcar’s 2,000-plus employees won’t necessarily keep their jobs if the firms that are buying them decide that they’re redundant.
Here are the five business units that the Jacksonville, Florida-based company is selling off, and how many truck drivers work for each, according to federal data:
- CT Transportation, 390 truck drivers, being sold to PS Logistics
- CTL Transportation, 204 truck drivers, being sold to Service Transport
- MCT Transportation, 225 truck drivers, being sold to White Willing Holdings
- CCC, 130 truck drivers, buyer not disclosed
- CTTS Repair, no truck drivers, buyer not disclosed
Comcar is even larger than Celadon was when it went bankrupt late last year. The company brought in $227 million in revenue last year, according to trucking industry publication Transport Topics.
Since late 2018, the trucking industry has been in a recession. In the first half of 2019, around 640 trucking companies went bankrupt, according to industry data from Broughton Capital LLC. That’s more than triple the number of bankruptcies from the same period last year: 175.
The coronavirus is extending that recession, with scores of massive trucking brokers announcing lay-offs. Comcar is the first major trucking company to announce a bankruptcy since the virus began to slam truckers.