A truckload giant just filed for bankruptcy, and it leaves nearly 3,000 truck drivers jobless

rpremack@businessinsider.com (Rachel Premack)

The trucking "bloodbath" of 2019 is ending on a remarkably sour note.

Indianapolis-based Celadon, a truckload carrier that grossed $1 billion as recently as 2015, filed for bankruptcy on Dec. 9. It's poised to be the largest truckload bankruptcy in history, leading industry publication FreightWaves reported on Friday.

And the company's drivers are already getting slammed.

The bankruptcy has the potential to leave nearly 3,000 truck drivers stranded away from home, while the company has assured truck drivers that will not happen. Celadon employs 2,500 truck drivers, and works with 380 owner-operators. 

The filing also leaves some 1,300 administrative employees, most of whom work in Celadon's Indianapolis headquarters, jobless right before the holidays.

Celadon sent a message shortly after midnight on Dec. 9 informing truck drivers that the company was filing for Chapter 11 and that all loads in transit would be delivered, according to images shared with Business Insider. Celadon did not immediately respond to a Business Insider request for comment.

Here's the full text of the message (line breaks and emphasis ours): 

** Fleetwide message: We regret to inform everyone that Celadon Group Inc. has filed for a Chapter 11 bankruptcy. We will continue to haul and deliver all loads that we now have in transit. We will have more information in the morning as to where equipment needs to be returned to.

We have been assured that everyone who follows instructions will be paid for the work and miles assigned and completed, and Celadon will not leave anyone stranded away from home. 

Finally, we truly appreciate your commitment and dedication to this company, and wish you all luck moving forward. 

Celadon Management

Celadon to pay $5.44 million in unpaid wages and termination bonuses

According to a federal filing, Celadon is seeking to pay its total 3,800 employees around $3.9 million in unpaid wages, along with more than $1 million in termination bonuses. The termination payment works out to about $267 per worker. 

celadon bankruptcy filing

Sources told Business Insider that some Celadon truck drivers' Comdata fuel cards were already being turned off, leaving them unable to get home without spending serious cash on gas or arranging their own transport by car, plane, or bus. 

Read more: Truckers can't pay off their fuel cards — and it's a 'sure sign' more trucking bankruptcies are coming

It costs around $400 to $600 to refuel a semitruck. As long-haul truck drivers earn a median annual income of $43,680, it's a considerable amount of money to front.

Many truck drivers shared on social media over the weekend that they were scared of getting stranded. Numerous Facebook groups, including Celadon Closure Assistance and Jobs, were set up to help stranded Celadon truck drivers connect. 

Accounting fraud scandal plunged Celadon into the red

2019 has been a challenging year for truck drivers and their employers. About 640 trucking companies went bankrupt in the first half of the year, according to industry data from Broughton Capital LLC. That's more than triple the roughly 175 bankruptcies from the same period last year.

ACT Research has said America's $800 billion trucking market entered a recession early this year. Freight volumes have declined for 11 straight months. Manufacturing, which tracks the trucking industry, has contracted for four straight months.

Read more: Another 1,000 truck drivers lost their jobs in November, and it's a chilling sign for the economy

The source of Celadon's troubles dates back further, however. On Thursday, the Securities and Exchange Commission charged two former Celadon executives following a multiyear accounting scandal.

The news plunged Celadon's stock to $0.41 a share on Friday — a considerable tumble from the more than $20 a share that the stock was worth in 2015 before the accounting scandal became public knowledge. As of Monday, share prices were at $0.03. 

Are you a Celadon truck driver who is at risk for being stranded? Email rpremack@businessinsider.com.

Read more about the trucking recession of 2019:

America's largest truck-engine manufacturer just announced 2,000 layoffs — and it's another sign of the trucking 'bloodbath' that's slamming the $800 billion industry

Truckers are becoming more and more pessimistic about the US economy

Truckers can't pay off their fuel cards — and it's a 'sure sign' that more trucking bankruptcies are coming

'I don't know how long I can stay in business': Truckers' fears have soared to recession-level highs

Truckers say Amazon's new logistics empire is being underpinned by low, 'ridiculous' rates — and some are refusing to work with them

The leading industry group for truck drivers has declared we're hurtling toward a trucking 'bloodbath'

And read the initial bankruptcy filling here

 

Business Insider