BREAKING NEWS: 344-unit truckload carrier suddenly shuts down, latest in string of failures
Two days after HVH Transportation’s abrupt closure on Tuesday, August 27, 150 truck drivers, including James Delva, are still stranded across the country without working fuel cards.
Delva told FreightWaves early Thursday, August 29, that he is currently under a load and stranded in Phoenix, Arizona, more than 1,800 miles from his home in Lawrenceville, Georgia. He said his sister purchased a bus ticket so he could get home.
“It’s not fair or right for drivers who dedicate themselves and practically live on the road in their trucks,” Delva told FreightWaves. “I am doing my job, driving safe and careful, but I’m not being paid for my time and hard work.”
HVH, which has also gone by the name of Thacker Brothers Transportation, had 324 drivers and 344 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website.
On Thursday, Aug. 29, a senior executive at HVH, headquartered in Denver, Colorado, said he is working to get drivers home, but claims a dispute with the company’s bank is the reason the motor carrier shuttered operations without advanced notice. He told FreightWaves that he is negotiating with U.S. Bank to get the fuel cards turned back on and get the drivers home.
The HVH official, who did not want to be named, said the motor carrier recently ramped up its hiring of nearly 75 new drivers in recent weeks after receiving a new business award of around $15 million.
“This was a complete surprise because we had growth from both a revenue and truck growth side and we were not losing money, so this wasn’t a negative cash flow situation,” a HVH executive said.
He said the company needed a cash infusion to pay for the new drivers and that 22 truckers were currently going through HVH’s new hire orientation at its headquarters in Colorado at the time of the closure.
HVH is owned by HCI Equity Partners. A former HVH executive said HCI was willing to invest another $1.5 million in the company to pay for the hiring of new drivers. He said the private equity company reached out to U.S. Bank to negotiate a deal, but HCI wanted a concession from the bank that would allow the motor carrier to sell its old equipment in order to upgrade its trailer fleet. The trucking executive claims the bank refused to negotiate a deal with HCI and HVH and was then told the motor carrier was in violation of its forbearance agreement, which required that HVH have a minimum liquidity of $500,000 in the bank. He claims the bank froze the carrier’s accounts without notice on Monday, August 26.
“We dipped below our minimum a little bit over the weekend and they used that as a default and they [U.S. Bank] said not only will they not allow the private equity firm to invest $1.5 million, but that they were going to take over the company and put it into Chapter 7,” the HVH executive told FreightWaves. “This happened overnight.”
In a statement, U.S. Bank disputed the HVH senior executive’s claims, but added that “as a general matter, we do not discuss customer relationships,” Cheryl U. Leamon, vice president and corporate strategic planning manager of U.S. Bank, told FreightWaves on August 28.
Shari Lee Campbell, former driver manager for HVH, said there were red flags that the company was experiencing financial woes in the weeks leading up to the company’s closure. She claims that drivers weren’t paid in a timely manner and that the company was behind on its truck leasing payments with both Ryder and Penske.
“We had been having payroll issues for nearly a month and our phones and internet were shut off a few weeks ago for non-payment,” she told FreightWaves. “We were told we were switching providers and that was the reason for the service interruption.”
Campbell said she received a call about an hour before her shift started on the day of the shutdown, telling her to come get her things because the company was closing its doors. Once she arrived at the office, the phones were ringing, but she said she was instructed not to answer. She said she ignored their advice.
“Drivers were calling in trying to find out what was going on and I told them to go fuel up their trucks immediately before their fuel cards were shut off,” Campbell told FreightWaves. “By midnight, the fuel cards were turned off and drivers were reporting they were stranded.”
She has been working with 50 to 60 drivers to help them get home, something Campbell claims HVH company executives have not been doing.
“Management has not contacted these drivers at all to help them get home,” she said.
Since January, the company had invested in 150 new tractors through Penske and Ryder to update its fleet. One-third of its drivers were company drivers and two-thirds were owner-operators and independent contractors with lease-purchase deals.
Drivers were instructed via their electronic logging devices to return their leased trucks to a Ryder or Penske dealership. On August 28, a Ryder representative at its Denver, Colorado, office confirmed it is working with HVH drivers to recover its leased equipment.
“We realize this is a bad situation and we want to be sensitive to what these drivers are going through,” the Ryder representative told FreightWaves.
Shortly after finding out about HVH’s sudden closure on August 27, Heidi Jensen, human resources director for Navajo Express, which is also headquartered in Denver, Colorado, said her company sprang into action to try and hire the displaced drivers.
“We immediately started making calls and early Wednesday morning our team was kind of positioning itself between our headquarters here and over at HVH headquarters to help drivers, who were returning off the road and turning in their trucks and essentially help them figure out how they were going to get home,” Jensen told FreightWaves.
“Several former HVH drivers who met our qualifications are now going to come on board as drivers for us,” she said.
Michael Desalme had only worked for the company for three weeks when he found out the company was shutting down on Tuesday as he was moving equipment around in the HVH terminal yard in Colorado.
“I was completely blindsided by the news,” Desalme told FreightWaves. “I have yet to receive my first paycheck.”
After the shutdown, Desalme said he spent the first night in his truck, but he was forced to turn in his truck on Wednesday.
Even though he wasn’t hired by Navajo, Desalme said the trucking company offered to pay his bus fare back home to Memphis, Tennessee.
“I am basically homeless because the truck was my home,” Desalme said.
A senior executive at HVH said U.S. Bank agreed to release $300,000 of the company’s funds to pay drivers, who will receive their checks on Friday, August 30.
“From a financial standpoint, it’s in the bank’s best interest to do that because part of their liquidation value is $6.5 million of open accounts receivable and if these loads don’t get delivered, customers will offset open accounts receivables with claims so the bank would not get anything,” he said.
Some HVH customers are paying fuel bills and compensating drivers to ensure their loads are delivered, Campbell said.
A day after HVH shuttered operations, another carrier, Ready Trucking, based in Ellenwood, Georgia, announced it will cease operations on August 30. The company had 91 drivers and 108 power units, according to FMCSA’s SAFER website.
“2019 has been the worst year of profitability in the trucking industry in over five years,” said Craig Fuller, chief executive of FreightWaves. “Even the downturn of 2016 was not nearly as painful in terms of operating losses.”
Nine mid-size and large carriers have shut their doors in 2019 including NEMF, Falcon and LME.
