A Nashville, Tennessee-based freight brokerage ceased operations Tuesday, laying off around 130 employees after its parent company pulled the plug on operations without warning, according to sources familiar with the layoffs.
A manager for Universal Capacity Solutions (UCS) told FreightWaves on Thursday that a skeleton crew is staying on to help with the wind down and ensure that trucking companies hauling loads for the now-defunct 3PL are paid.
He said initial reports of some motor carriers being stranded under loads with no guidance from the now-defunct 3PL could possibly be chalked up to a miscommunication when trucking companies were unable to reach the brokers through which they had booked the loads with UCS.
“It’s chaotic around here but we’ll stay open as long as it takes to pay all the carriers,” said the manager, who did not want to be named for fear of retaliation. “We have a skeleton crew still here, and we are trying to answer as many phone calls as we can to track down any paperwork we need to pay these companies.”
Some trucking companies shared messages from UCS brokers about the 3PL’s demise on Wednesday, although FreightWaves was unable to independently verify the closure until Thursday.
Universal Capacity Solutions is a wholly owned subsidiary of Universal Logistics Holdings Inc. (NASDAQ: ULH), headquartered in Warren, Michigan. ULH operates several subsidiaries that provide logistics and transportation services throughout North America.
As of publication Thursday, Tim Phillips, president and CEO of ULH, had not responded to FreightWaves’ request for comment.
In December 2009, ULH acquired Cavalry Logistics from its founder, Bob King. It renamed the Nashville-based 3PL to UCS in January 2020.
FreightWaves confirmed Thursday that ULH had not filed a Worker Adjustment and Retraining Notification (WARN) Act notice with the Tennessee Department of Labor and Workforce Development about its plans to close the Nashville brokerage and eliminate 130 jobs.
Employers with more than 100 employees are required to notify workers as part of the federal law. WARN requires employers to provide their employees with a 60-day notice of a massive layoff.
In some instances, the WARN Act makes an exception for mass layoffs caused by business circumstances that were not “reasonably foreseeable at the time that 60-day notice would have been required.”
Sources familiar with the situation said they knew the brokerage was financially struggling amid the ongoing freight recession, which has forced hundreds of trucking and logistics companies to shut down or scale back operations over the past few years.
“We were under a lot of pressure to make money, but we were all in utter shock when the announcement was made that we were closing,” the manager said. “Everyone in the office that was tenured more than six months was given severance, which helps. Freight fraud, stolen loads and double-brokered loads have become a real problem in this recessionary market. If you’re running right at 10% or 8% where most of us are, and you have one stolen load, that just blew the profit for that account for a month.”
This is a developing story.
Timothy Dooner of What The Truck?!? contributed to this report.
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