2024 was another brutal year for trucking companies and freight brokerages. Thousands of firms called it quits, sought bankruptcy protection or both. Fraud-related stories also dominated the headlines. FreightWaves looks back at some of the year’s key stories.
Illinois-based Nationwide Cargo Inc. files for bankruptcy
Founded in June 2010, Nationwide Cargo Inc. of East Dundee, Illinois, filed for Chapter 11 bankruptcy on March 13. The company hauls general freight, fresh produce and meat, according to the Federal Motor Carrier Safety Administration’s SAFER website.
The petition, filed in the U.S. District Court for the Northern District of Illinois, listed Hristo Angelov as the president of Nationwide Cargo.
No reason was given as to why the carrier filed for bankruptcy protection, but it sought to reorganize, according to the petition. Nationwide Cargo listed its assets as between $1 million and $10 million and its liabilities as between $10 million and $50 million. It had 171 drivers and 183 trucks.
At the time of its filing, Nationwide Cargo was involved in three pending lawsuits in Tennessee, Illinois and Arizona. Read more here.
92-year-old Texas carrier files for bankruptcy liquidation
A 92-year-old trucking company, Arnold Transportation Services of Grand Prairie, Texas, which had 341 truck drivers and 402 power units, ceased operations in late April 2024 and filed for Chapter 7 bankruptcy liquidation.
Three affiliated companies — Parker Global Enterprises, Parker Transport Co. and DVP Holding Corp. — also filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the District of Delaware.
In February 2022, Arnold Transportation was acquired by Pride Group Logistics, an affiliate of Pride Group Holdings of Mississauga, Ontario, one of Canada’s largest trucking and leasing companies. Pride Group and its affiliates, including the four companies listed above, filed for creditor protection on March 28 in Canada, citing a capacity glut and low rates.
Pride Group stated in court filings that “Arnold has not been profitable and therefore Pride Logistics has been funding Arnold operations. Some of Arnold’s dispatchers are paid through Pride Logistics payroll.”
Former Arnold Transportation drivers reported being laid off without warning on April 25 and stated that their medical benefits were also canceled.
The company listed its assets as up to $10 million and its liabilities as between $10 million and $50 million, according to the petition, which stated that it has up to 199 creditors and that funds would be available for distribution to unsecured creditors. Read more here.
California Intermodal Associates Inc. blames independent contractor law for closure
A family-owned trucking company and brokerage, California Intermodal Associates Inc. (CIA), headquartered in Commerce, California, was forced to cease operations in April 2024 after nearly 25 years, citing the state’s independent contractor law.
CEO Gabriel Chaul told FreightWaves the law – AB5 – was the main reason his company was forced to close. He said all hope that his company would survive faded in March after a federal judge in California rejected trucking and trade associations’ legal challenges to stop enforcement of AB5, a controversial state law that severely restricts the use of independent contractors.
“California is a hostile place to operate a business,” Chaul said. “This law has created a hostile operating environment and an environment of unfair competition.”
Chaul said his company complied with the law and switched his owner-operators over to become a company fleet of around 30 drivers.
“We had a hard time maintaining that number because they started falling off because they were enticed by our competition that builds its business with owner-operators,” he said.
Chaul said once he notified customers that the company was fully compliant with AB5, the phones stopped ringing.
“It seems like as soon as our customers knew that we were complying with the law and hiring employee drivers and had our own assets, our costs went up by as much as 30%,” he said. “There was no incentive to use CIA anymore.” Chaul’s company has not filed for bankruptcy. Read more here.
Texas-based US Logistics Solutions filed for bankruptcy liquidation
About 2,000 truck drivers, warehouse and dockworkers, and office personnel of Humble, Texas-based US Logistics Solutions (USLS), formerly Forward Air Solutions, say they were blindsided on June 20 when they were notified via conference calls or text messages that the company was ceasing operations and they would not receive paychecks the following day.
USLS, a logistics company that provided last-mile handling and distribution of time-sensitive products, had 500 drivers and 732 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website.
In a statement to FreightWaves after the closure and bankruptcy filing, a spokesperson for Ten Oaks Group, the private equity firm that owned the logistics firm, said the company was “deeply disappointed by the lender’s sudden decision to cease further funding for US Logistics Solutions, which left the company no time to provide advanced notice to employees or properly wind-down operations.”
From Jan. 1, 2024, to its filing date, the company listed its gross profits as around $70 million. In 2023, it made over $217 million and in 2022 it made $203 million. Read more here.
LTL carrier Tony’s Express filed for Chapter 11
Less-than-truckload carrier Tony’s Express of Fontana, California, filed for bankruptcy protection in June, nearly three months after it abruptly ceased operations by notifying around 200 truck drivers, warehouse workers and office personnel via text message that they no longer had jobs.
John H. Ohle, president and sole shareholder of Tony’s Express, bought the company in May 2023 from brothers Anthony “Tony” Raluy and George Raluy. Their father started the business in 1954.
Less than a year after acquiring Tony’s Express, Ohle shuttered operations of the 70-year-old carrier by sending workers a text message on March 28. The message, which was obtained by FreightWaves, notified employees that the company was closing its doors that day and could not cover the previous week’s payroll or workers’ paid time off.
“The current market just didn’t support our ability to operate and be a profitable company, and the cost of fuel in California made it very difficult,” Ohle told FreightWaves a few days after the closure. “We were in very serious discussions with two different companies about coming in and partnering or taking over Tony’s, and those fell apart at the very end, and literally, it was a last-minute decision.”
Tony’s Express filed its Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the Central District of California, under subchapter V, which provides a path for small businesses seeking to reorganize.The filing for Tony’s Express listed both its assets and liabilities as up to $10 million. The company states that it has up to 199 creditors and that funds will be available for distribution to unsecured creditors. Read more here.
On Oct. 29, U.S. Bankruptcy Judge Vincent P. Zurzolo granted Tony’s Express’ motion to dismiss its Chapter 11 bankruptcy case pending its paying the allowed fees and expenses of the subchapter V trustee.
Former US Postal contractor Midwest Transport Inc. abruptly ceases operations
An Illinois-based trucking and logistics company that contracted with the U.S. Postal Service to haul mail notified over 650 employees, including more than 480 drivers, that the carrier is ceasing operations, according to sources familiar with the closure.
Former truck drivers for Midwest Transport Inc. (MTI), headquartered in Robinson, Illinois, told FreightWaves that they received telephone calls from their regional managers on Sept. 6 notifying them the company was winding down operations. According to an email, obtained by FreightWaves, that was sent to MTI employees and drivers about the closing, the company stated that postal operations “will complete all trips through the trips that begin on Sunday, September 8. Freight operations should be following the instructions from your load planners on returning. Terminal and office personnel will receive information and updates from your managers as we progress through this transition.”
MTI, founded in 1980, operated key terminals in Greenup, Illinois; Harmony, Pennsylvania; Memphis, Tennessee; and two terminals in Tampa and Jacksonville, Florida, according to its website.
MTI had over 480 drivers and 428 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website. According to the SAFER database, MTI was cited for acute/critical violations in two categories: controlled substances/alcohol and driver fitness.
Prior to ceasing operations, MTI had two compliance reviews on July 7 and July 25, according to FMCSA. Read more here.
According to court filings, a receiver, First Merchants Bank, was appointed over the assets and liabilities of MTI in Crawford County, Illinois, Circuit Court on Sept. 9, the same day a former employee, Anthony Ballog, filed a Worker Adjustment and Retraining Notification Act complaint against the former Postal Service contractor. Read more here.
MTI denied that it was liable under the WARN Act to provide a 60-day notice of a planned shutdown before laying off 650 employees, including nearly 500 drivers, claiming the company was “actively seeking capital to stay open and further unforeseeable business circumstances forced the closure of MTI,” according to court documents. The company also stated that it consented to the receivership because MTI was in default under the loan documents and First Merchants Bank had a vested interest in the efficient operation of the business to manage, protect and preserve the collateral.
Starship Logistics LLC of Long Beach filed for Chapter 11 bankruptcy
A California logistics company filed for bankruptcy protection, citing the loss of its largest “anchor” customer as one of the main reasons it is seeking to reorganize.
Starship Logistics LLC of Long Beach filed for Chapter 11 bankruptcy on Nov. 11 in the U.S. Bankruptcy Court for the Central District of California. The filing comes amid eviction legal proceedings and several lawsuits being filed against Starship Logistics for breach of contract.
Starship Logistics is owned by RPG Star Holdings Inc., which was incorporated in Delaware. Starship Logistics, located near the Port of Long Beach, provided international customers mid- and last-mile logistics services “to fulfill all types of shipping requirements,” according to its website.
The company also stated that it offered a cloud-based platform that “integrates order and label management, operational capability management and logistics resources for e-commerce merchants and global freight forwarders … and that its software is ‘able to sync with major e-commerce platforms, including DHL, Shopify, eBay, Amazon’s service provider network, UPS, and the U.S. Postal Service,’” according to court filings.
The company lists both its assets and liabilities as between $1 million and $10 million.The company stated that it had up to 49 creditors and that funds would be available for distribution to unsecured creditors.
The company’s gross revenues from Jan. 1 until its bankruptcy filing date were around $8.7 million. Its petition stated the company made about $14.3 million in 2023 and nearly $12.1 million in 2022.
In its petition, Starship Logistics stated that it was named in eight legal actions that were pending or had concluded in California state court. Read more here.
Miami trucking company, 5 affiliates file for Chapter 11
A Miami trucking company and its five affiliates with more than 400 drivers filed for Chapter 11 bankruptcy protection on Nov. 1.
Star Transportation PA Inc., doing business as Star Transportation of Miami, filed for bankruptcy protection on Nov. 1 in the U.S. Bankruptcy Court for the Southern District of Florida.
A day later, its five affiliated companies – Finance Solutions LLC, MDL Business Group LLC, Star Transportation A Inc., Star Truck Service Inc. and US Express Line LLC – also filed for Chapter 11 bankruptcy. U.S. Bankruptcy Judge Corali Lopez-Castro approved the entities’ motion to have the cases jointly administered with Star Transportation PA as the lead case.
The companies filed a consolidated creditor matrix because the debtors operate as an integrated business and share cash management and operational systems.
Star Transportation has 411 drivers and 233 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website, and remains in operation. The companies list assets of nearly $10.3 million and liabilities of around $29.5 million. The petition listed the number of creditors as up to 99 and stated that funds would be available for distribution to unsecured creditors. It listed its accounts receivable as nearly $2.2 million.
The bankruptcy petitions, which sought to reorganize, listed Victor Khramov as the president and 100% shareholder of all six entities.
In a court filing, Khramov said the trucking industry had been in a state of distress for several years, but that “the situation in 2024 has reached unprecedented levels, with a cascade of negative trends creating a perfect storm of financial distress and widespread collapse.”
Khramov also blamed rising fuel costs, increased insurance claims, and the cost of maintaining and repairing trucks and trailers, which has skyrocketed, with some repair costs nearly triple what they were a few years ago, according to court documents.
The move to file for Chapter 11 reorganization came after Star Transportation and its entities learned that one of its lenders had issued an order for the repossession of 47 of its financed trucks, according to court documents.
Creditors with secured claims by property include: VFS US LLC of Greensboro, North Carolina, owed more than $3 million; Banc of America Leasing and Capital LLC of Atlanta, owed over $2.2 million; and M&T Capital and Leasing Corp. of Bridgeport, Connecticut, owed nearly $1.2 million.
The decision to file for bankruptcy protection came nearly a week after two former workers of Star Transportation filed a lawsuit in federal court alleging that the trucking company and its entities misclassified workers as independent contractors instead of employees in violation of the Fair Labor Standards Act. The deadline for all creditors to file a proof of claim is Jan. 10, 2025, while the government has until March 30, 2025, to file a proof of claim. Star Transportation and its entities must file a Chapter 11 plan by March 3, 2025. Read more here.
California-based Kal Freight with 600 drivers files for Chapter 11
Kal Freight on Dec. 5 filed for Chapter 11 bankruptcy in the Southern District of Texas. Filing of Chapter 11 will allow the company to reorganize while continuing operations.
Co-founder MP Singh told FreightWaves no jobs should be impacted by the restructuring and that operations will continue as normal for the Texas-based company. According to a filing with the Federal Motor Carrier Safety Administration, Kal Freight employed 600 drivers and had 580 power units.
Singh said the company had overexpanded after experiencing a surge in demand in 2020 because of the coronavirus pandemic.
“I think we did so much of overexpansion, and we lost money in the new ventures of ours and tires and everything, but Kal Freight was always making the money,” he said in an interview with FreightWaves.
“We were doing good, but all the money was being used from Kal Freight.”
Kal Freight will be pulling back from other ventures, including KVL Tires, its tire company, he said. Other businesses included aircraft parts distribution, truck parts distribution and trailer leasing. The company will wholesale its parts and tires and will also sell some properties, including personal real estate.
The bankruptcy filing shows that the company has 50 to 99 creditors. The creditors with the largest unsecured claims include companies offering professional services, inventory and litigation.
Unsecured claims total at least $24 million, according to court filings. Among the largest unsecured creditors are CIMC Reefer Trailer Inc., owed more than $12 million; Continental Tire, owed more than $1 million; and Cargo Solution Express, owed more than $950,000.
The company was founded in 2014 and has locations in California, Texas, New Jersey, Indiana, Tennessee, Georgia, Arizona and Arkansas.
However, a deeper dive into Kal Freight’s court documents in its Chapter 11 bankruptcy revealed a far more troubling picture of its operations, as reported by FreightWaves founder Craig Fuller.
According to his report, Daimler Truck Financial Services USA LLC, the company’s largest vehicle finance lender, has uncovered evidence of massive fraud perpetrated by Kal Freight against its creditors. Daimler alleged that Kal Freight fraudulently obtained nearly $16.9 million to purchase 164 trailers from Vanguard. However, the company never actually paid Vanguard or received the trailers. Instead, Kal Freight somehow managed to provide Daimler with fraudulent certificates of title for these nonexistent trailers, complete with recorded liens. Kal Freight continued to make monthly payments on this loan as if the trailers had been purchased and were in its possession. Read more here.
Humper Equipment, RBX Inc. file for Chapter 11
Humper Equipment LLC and its trucking affiliate, RBX Inc., headquartered in Strafford, Missouri, filed emergency bare-bones Chapter 11 bankruptcy petitions in December in the U.S. Bankruptcy Court for the Western District of Missouri. The trucking company has 265 power units and 255 drivers, according to the Federal Motor Carrier Safety Administration’s SAFER website. Read more here.
In the four-page amended petition for Humper, which was filed on Dec. 23, the equipment leasing company listed assets as up to $10 million and liabilities as between $10 million and $50 million. The petition listed the number of creditors as up to 99 and stated that funds would be available for distribution to unsecured creditors.
In its amended bankruptcy petition, RBX listed assets and liabilities as between $10 million and $50 million.
Humper Equipment and RBX Inc. claimed the filings were necessary to prevent further repossessions and reclaim those vehicles that were repossessed, James A. Keltner, CEO of RBX, stated in court filings. Both companies sought to reorganize and continue operating as usual.
On Jan. 3, 2025, RBX Inc. and its equipment leasing affiliate, Humper Equipment, filed suit against Paccar Financial Inc. of Bellevue, Washington. They are asking a Missouri bankruptcy judge to force Paccar to turn over 28 Kenworth and Peterbilt tractors it repossessed in late November amid an ongoing engine performance dispute with the global commercial truck financing company and its subsidiary, Paccar Engine Co.
According to the seven-page complaint filed prior to the commencement of these bankruptcy proceedings, Humper and RBX “began experiencing engine performance issues in a large number of the trucking units, which, upon information and belief, were caused by computer malfunctions stemming from faulty design by Paccar Engine.”
In early November 2024, the entities participated in ongoing attempts to resolve the issues related to the engine malfunctions with Paccar Engine and Paccar Financial. Despite those efforts, Paccar seized the tractors from RBX’s facility in Strafford.
However, in court documents, Keltner acknowledged that Humper and RBX “did not pay in full their financing obligations [to Paccar] and attempted to renegotiate such obligations in light of the performance issues, which led to more downtime and significantly increased RBX’s cost of doing business.” Read more here.
Yellow Corp. continues winddown in Chapter 11 bankruptcy
FreightWaves’ Todd Maiden continued to report on the winddown of less-than-truckload carrier Yellow Corp. since Aug. 6, 2023, when the 99-year-old trucking firm filed for Chapter 11 bankruptcy protection, making it the largest filing in U.S. trucking history.
On Dec. 18, Maiden reported that a federal bankruptcy judge in Delaware approved two separate purchase agreements representing $192.5 million of Yellow Corp.’s real estate. According to his article, Richmond, Virginia-based less-than-truckload carrier Estes is buying 11 terminals, four of which are leased, from defunct Yellow (OTC: YELLQ) for $142.5 million, and Wilmington, Ohio-based R+L Carriers is buying one location – a 304-door terminal in Maybrook, New York – for $50 million. Read more here.
Maiden also reported on an upcoming Jan. 21 hearing regarding claims by former Yellow employees that they weren’t given proper notice of mass layoffs, which occurred in July 2023, under the WARN Act. Read more here.
Ex-Slync CEO Chris Kirchner sentenced to 20 years
Ex-Slync CEO Christopher Kirchner was sentenced to 20 years in federal prison on July 11 in the U.S. District Court for the Northern District of Texas. In his ruling, U.S. District Court Judge Mark T. Pittman also ordered Kirchner, 36, of Westlake, Texas, to pay over $65.4 million in restitution. Kirchner had remained in custody since a jury found him guilty of four counts of wire fraud and seven counts of money laundering following a four-day trial in January. Pittman denied his motion seeking bail until sentencing. Soon after the company received the $60 million fund raise in 2021, court filings in a wrongful termination lawsuit by a former company vice president claimed Kirchner bought a 2010 Gulfstream G550 jet for $16 million. It has since been sold. Read more here.
Kirchner was facing a maximum prison sentence of 150 years. The jury found that Kirchner, who served as Slync’s CEO from 2017 until he was fired by the FreightTech company’s board of directors in August 2022, defrauded investors out of nearly $25 million for his personal use. Before his firing, sources told FreightWaves that Kirchner had come under scrutiny after he failed to pay employees for months, used his private jet to fly to celebrity golf tournaments and attempted to buy an English soccer team. Read more here.
Slync was forced to seek an alternative option to a traditional bankruptcy and wind down operations in October 2023 after Kirchner filed suit a month earlier against his former employer for legal fee advancement and indemnification in Delaware’s Court of Chancery.
Kirchner sought to have Slync pay his legal bills in his fraud case after his assets were frozen and a federal public defender was assigned to handle his case. Read more here.
Freight ransom allegations rock brokerage industry
A freight ransom scheme rocked the brokerage industry in July after nearly two dozen freight brokers said an Illinois trucking company and its network of “affiliated carriers” targeted their companies a few days before the Fourth of July holiday and were holding 36 confirmed loads hostage until ransom demands were paid.
On July 8, 22 freight brokerages came forward with claims that their companies fell victim to an elaborate scheme allegedly orchestrated by Agility Express Inc. of Mundelein, Illinois, and its affiliate network of more than 24 carriers. Some brokers said they called law enforcement about their freight being held hostage but were told it appeared to be civil disputes with the carriers.
The amount of unpaid debt allegedly owed to Agility and its affiliates ranges from a few hundred dollars to around $9,000 owed to a carrier that a broker suspected of double-brokering and paid the amount to the trucking company that actually delivered the loads. Some of the unpaid debts went as far back as 2019. After searching through their records, the brokers FreightWaves spoke to found the unpaid fees Agility and its affiliates were attempting to collect, but added that the carriers were aware of the brokerages’ policies for missing appointment times, missing cases of product or failing to properly secure loads in transit. Read more here.
Royal Bengal Logistics owner convicted in $112 million Ponzi scheme
Following a two-week trial in November, a federal jury in the U.S. District Court for the Southern District of Florida convicted Sanjay Singh, 45, of Coral Springs, of eight counts of wire fraud, money laundering and conspiracy charges for his role in an elaborate three-year truck investment Ponzi scheme that bilked investors out of $112 million.
Singh, who founded Royal Bengal Logistics Inc. (RBL), a Florida trucking and logistics company, remains in custody by the U.S. Marshals Service until his sentencing, which is set for Feb. 28. RBL purportedly had 91 drivers and 166 power units, according to the SAFER website, until its operating authority was involuntarily revoked. Read more here.
In a parallel civil case, the U.S. Securities and Exchange Commission filed a complaint against Singh in June 2023, accusing him of fraudulently raising approximately $112 million from investors in a Ponzi scheme. The complaint stated that Singh, through RBL, “sold investors high-yield investment programs that purportedly generated 12.5% percent to 325% in guaranteed returns.”
The SEC also charged two more RBL executives with participating in a truck investment scheme. Ricardi Celicourt, 40, of Coconut Creek, and Brisly Guillaume, 39, of Boynton Beach, were named in a lawsuit filed by the SEC in July 2024 in the U.S. District Court for the Southern District of Florida. The lawsuit charges both with violations of securities registration and broker-dealer registration provisions. Read more here.
Westfield Transport co-owner sentenced for falsifying driving logs
In November, the co-owner of now-defunct Westfield Transport of West Springfield, Massachusetts, was sentenced to two months in prison after admitting that he falsified driving logs and lied to investigators in connection with a June 2019 fatal collision involving the driver of one of the company’s vehicles.
Dunyadar “Damien” Gasanov, 39, of West Springfield, co-owner of now-defunct Westfield Transport, pleaded guilty in August in the U.S. District Court for the District of Massachusetts to three counts of making false statements to federal investigators.
Judge Mark G. Mastroianni also sentenced him to one year of supervised release, during which he is prohibited from driving a commercial vehicle. Read more here.
In July 2022, a jury acquitted Westfield Transport driver Volodymyr Zhukovskyy, now 28, of killing seven members of the Jarheads Motorcycle Club. He originally faced seven counts of negligent homicide, seven counts of manslaughter and one court of reckless conduct in the collision in rural New Hampshire. However, jurors found that the lead motorcyclist of the Jarheads, Albert “Woody” Mazza, was impaired and over the centerline of the road at the time of the collision. Zhukovskyy was driving an empty flatbed trailer at the time of the crash. Read more here.
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