A major logistics company notified approximately 120 workers and truck drivers on Feb. 24 that it will permanently shutter its cross-dock facility in Coldwater, Michigan, on April 30.
The closure is in response to “the unexpected loss of a fair market bid with Ford Motor Company,” Randy Ryerson, vice president of marketing of Penske, said in a statement to FreightWaves.
He said employees and drivers were notified during an in-person meeting with local management on Monday.
Penske, headquartered in Reading, Pennsylvania, filed a Worker Adjustment and Retraining Notification Act (WARN) notice with the Michigan Department of Labor and Economic Opportunity on Feb. 24, according to Ryerson.
As of press time on Tuesday, the notice wasn’t posted on the state’s website. The WARN Act requires employees to provide 60 days’ notice of a possible plant closure or mass layoff.
In July 2019, Penske laid off 80 drivers and closed its terminal in Fort Wayne, Indiana, because of a “local trucking contract termination.”
The logistics provider has more than 5,000 drivers and around 3,600 power units, according to the Federal Motor Carrier Safety Administration SAFER website. Worldwide, Penske has around 18,000 employees and operates approximately 400 locations.
This news comes one day after FreightWaves covered the sudden closure of a terminal and abrupt layoff of 61 truck drivers who worked for Illinois-based Black Horse Carriers Inc. The carrier blamed the layoffs and closure of its Pewaukee, Wisconsin, terminal on a customer’s decision to “discontinue business” with Black Horse.
In related news, Dash Delivery LLC, a last-mile courier for Amazon’s Prime service, is closing its offices in Everett and Seattle, Washington, and laying off 106 workers April 23, according to a notice filed with the state. Amazon has been severing ties in recent weeks with vendors that don’t meet its performance and safety standards.
FreightWaves’ Eric Kulisch contributed to this report.
Dave F
Ford wouldn’t sign a contract with a company unless they were confident in execution.
You don’t walk away from a long time provider over a few pennies and to walk away is NOT greed. More business is lost over service and attention to needs of the customer than it is over dollars and cents. When the service isn’t there, when the customer feels taken for granted – the cost then comes to focus and you start shopping.
Rome Rome
I disagree Dave. Yes, Penske is a legacy provider for Ford, and traditionally untouchable. However, I don’t believe it’s a customer service issue with Coldwater. Coldwater is one the the most efficient cross dock facilities they operate. This does not jibe with poor customer service. About 2 years ago, Ford publicly announced a companywide cost cutting initiative. The area that had the biggest bullseye on it’s back was logistics spend. I can personally assure you that they are aggressively pursuing that initiative on the logistics side of the business. In todays cut throat, race to the bottom, agree to any rate just to get market share world of logistics, customer service means nothing any longer. Lowest price is the new elephant in the room. Carriers are running trucks with duct tape and bungee cords holding them together while they travel down the highway at 70MPH. They do this because they can’t afford to maintain their equipment with the rates they are hauling for. Essentially they are working for fuel and sandwich money. The shippers do not care about any of these things, just the price they pay. It’s a new world, one in which it will become increasing difficult for carriers of all sizes to make money. I’m hoping to retire from all this in about 5 years, and I personally cannot wait. The greed is out of control and shows no signs of slowing.
John
I disagree with the previous poster. I think FreightWaves provides an abundance of good real time information. Where else would you hear about all these companies going out of business. I doubt very serious that a company like ford would just sign a contract with a new on time carrier up and ready to go before the cancelled the contract with their current carrier. Which means they already have drivers. Not absorbing drivers. I’m always interested in small local companies that have been in business for years closing its doors. It tells you a lot about how bad this industry has become. High costs of doing business and to much regulations.
John
I meant Ford would not sign a contract with company that was not ready to go.
Not what you think
Folks. Many of the employees are usually hired by the new dedicated provider. Many times there is a reduction of pay and or benefits. Those reductions are usually required to win the business. When you have contract business for a long period of time someone usually comes in and cuts your price. The contract freight business is cyclical. There are only a few ways to do that and that is by cutting wages and benefits. There might be some operational synergies but more often than not its wages and benefits. This happens all the time and I think it’s pretty irresponsible of Freightwaves to present it the way they are doing. Pretty sad that media bias is now at Freightwaves. Let’s scare everyone to death with every headline we can.
Ulysses Nixon
So sorry for all of these employees loseing their jobs..But as greed overwhelms us people suffer
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