LTL carrier New England Motor Freight to shut down after filing for bankruptcy protection


While industry watchers knew NEMF was having problems, no one had anticipated a bankruptcy filing and a subsequent shutdown. What’s more, LTL capacity is currently so tight that it will be impossible to efficiently absorb all of NEMF’s volumes at prices that shippers have been accustomed to, said Satish Jindel, who heads consultancy ShipMatrix and is familiar with NEMF’s operations. “There isn’t enough supply in the market to handle this,” he said in an interview late today.

According to Jindel, NEMF was weighed down by “onerous” contracts with several very large shippers, one of them being Amazon.com, Inc. (NASDAQ:AMZN). The contracts not only forced NEMF to operate on very thin margins, but made it difficult for the carrier to effectively serve other accounts that delivered better margins, Jindel said.

NEMF’s bankruptcy and closure should serve as a cautionary tale to shippers that took advantage of the carrier, and will now find themselves paying more to have their freight hauled, Jindel said. It also deals a devastating blow to Myron P. Shavell, who acquired the present-day NEMF in 1977 when it was in deep financial trouble, built it into the country’s fastest-growing family-owned LTL carrier, and at 84 years of age, will now watch it pass into history.

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Source:: Daily times

      

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