Postal Service contractor Matheson Trucking and wholly owned subsidiaries Matheson Flight Extenders (MFE) and Matheson Postal Services (MPS) of Sacramento are winding down operations after six decades in business.
Over the past five months, the Matheson entities have laid off nearly 3,500 workers, a source familiar with the situation told FreightWaves.
“It’s kind of sad to see that a 60-year-old company that made its bread and butter moving U.S. mail is closing its doors,” the source said.
According to the Federal Motor Carrier Safety Administration’s SAFER website, Matheson Postal Services has 191 power units and 325 truck drivers.
The news comes after MFE, a mail processing, transportation and logistics contractor, filed its latest Worker Adjustment and Retraining Notification (WARN) Act notice on Monday with the Missouri Office of Workforce Development that it plans to close its Kansas City facility, eliminating 40 jobs. The company also filed a WARN notice on Dec. 1 that it is slashing 60 jobs at its facility near Denver International Airport and eliminating 92 jobs in Grapevine, Texas. The letters list Jan. 31 as the timeline for the closures.
Under the WARN Act, employers with more than 100 employees at a location must give authorities a 60-day advance notice of a planned closure and job layoffs.
MFE and Matheson Postal Services are wholly owned subsidiaries of Matheson Trucking. The family-owned entities, founded by Robert and Carole Matheson in 1962, filed for Chapter 11 bankruptcy in May 2022. MFE has been providing services to the Postal Service since December 1998.
In a Nov. 30 letter to employees, obtained by FreightWaves, Matheson confirmed the closures.
“The Matheson companies have experienced tremendous growth in the past 5 years both in revenue and its workforce. However, recent changes to our business and drastic losses in contracts have led us to Chapter 11, and ultimately this very difficult decision,” the letter states.
As the company winds down operations, some employees will be asked to stay on longer to help with the closure, the letter states.
Asked about the Matheson entities ceasing operations, a spokesperson for the Postal Service declined to comment.
In early December, MFE closed two Surface Transfer Centers, which resulted in job cuts of 124 workers in Sacramento, California. An additional 257 workers were permanently laid off at its Long Beach, California, facility in November.
The U.S. Postal Service and MFE have been engaged in a financial dispute since MFE took over as the contractor for two Surface Transfer Centers in Atlanta and Brandywine, Maryland, in November 2021. At the time, MFE claimed the high-speed sorting equipment was not operational, around one-third of the loading docks weren’t functioning, and the former operator’s staff had not been fully trained and few were retained with MFE after the transfer, according to court documents. MFE closed those locations in October.
As the Postal Service was facing its holiday peak mail delivery season, court filings state that it began immediately directing normal peak volumes of mail to the facilities that MFE had just taken over but weren’t fully functional. The Maryland facility experienced a 4-mile-long train of tractor-trailers waiting to unload mail at the facility due to an alleged planning flaw by the Postal Service, MFE claimed in court documents.
“USPS demanded that MFE take immediate steps to address these problems and ensure timely delivery of mail. Among other things, at USPS’s direction, MFE incurred significant costs to repair the facilities to make them fully operational,” according to court filings.
As a result of ongoing issues, MFE negotiated a $15 million payment advance from the Postal Service to address problems, including the need for temporary labor to sort the mail by hand since the mail sorting equipment wasn’t operational. According to the deal reached between MFE and the Postal Service, MFE was to start repaying $300,000 per month starting in July 2022 with a balloon payment at the end of the three-and-a-half-year agreement.
MFE claims it incurred nearly $24 million in reimbursable costs from the Postal Service associated with the Atlanta and Maryland mail sorting facilities but that it “balked” about reimbursing MFE for the “ramp up” costs to make the mail sites operational.
While mediation has been ongoing between the parties since May, MFE claimed in a September court filing that over the previous 90 days the Postal Service “continued to either terminate or transfer to competitors several of MFE and MPS contracts.”
In August, MFE also announced it was eliminating nearly 1,000 jobs and closing its sorting facilities in Chicopee, Massachusetts, Atlanta and Brandywine.
Court filings state that in mid-August MFE received notice from the Postal Service that its “$20-plus million claim could not be completed without further documentation and no decision on the claim could be expected before March 2024.”
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Eli
FREIGHT COMPANIES ARE HURTING BAD TOO TOO-RULES AND REGS SET BY THE CLOWNS IN D C .E LOGS AND THE MUST DELIVER TOMORROW ATTITUDES BY CORPORATIONS MUST END! THIS COUNTRY GETS THEIR GOODS DELIVERED BY TRUCKS AND TRUCKERS!WAKE UP AMERICA BEFORE ITST TOO LATE!
CA trucker
George,
You are joking right?
60-100 M in the bank?
Work in the spot market?
Please buy Matheson and Yellow so you can rescue them.
The Truth Hurts
The USPS has started excercising their 60~day out clause for convenience, in effect no postal contactor will be able to get financing for start ups.
In addition they have allowed brokers to enter the market without requiring them to comply with postal badging or wage compliance.
There will be no asset based postal contractors left if this post master general is allowed to continue down this biased path. Furthermore the the worst victims will be the drivers who will no longer receive prevailing wages as brokered carriers.
This is what years of loyalty is rewarded with under this administration
Dan
Having worked at matheson before the chapter 11 all i can say is anyone who worked there saw this coming. The trucks were usually poorly maintained, they couldn’t retain drivers, and they had a nasty habit of trying to push drivers well past the point of safety resulting in many a rolled over or damaged truck. They also hired on many 3rd party seat filler companys with unsafe drivers.
Jim Farrell
I don’t like to see ANYONE lose their jobs!! However, with a few close calls with a couple of their drivers, perhaps it is best!!; ie. U.S. hwy 212 in/near Colony, WY. observed 1 of their trucks passing a slower movig truck with an approaching on-coming truck. The Matheson truck moved clear over to a right turn lane meant for the opposing traffic to avoid collision with the on-coming truck. That incident could have involved 5-6 other drivers, not to mention his own life!!
George
How does a 60 year old trucking company not have 60-100 million sitting in the bank for times likethese LOL. WHy can you pivot? You have truck, drivers, & trailers. Hit the spot market for a few months and let your sales guys go to town. not hard. People quit to easy
Tyrone Sanford
It sounds like inside fighting.
James Bauman
The Post Office seems to have put many lanes on the (cheaper) spot market. As carrier; I’ve hauled several; and they pay well. But IMO Post Office saves money via spot vs contract.