The trucking giant Celadon declared bankruptcy on Monday, according to federal filings.
It's poised to be the largest truckload bankruptcy in history, according to FreightWaves, which broke the story on Friday from internal sources.
The bankruptcy has the potential to leave nearly 3,000 truck drivers stranded away from home. The company assured truck drivers in an internal message after midnight on Monday that they would not be stranded and that they would receive full payment for their work.
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 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.
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.
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.
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 email@example.com.