Three days after nearly 450 employees, including 135 drivers, were laid off — some discovered via a Zoom video call — LandAir’s Williston, Vermont-based management team and its private equity owners remain silent on which led to the decision to pull the plug. the 54-year-old LTL carrier.
FreightWaves said employees of the LTL carrier serving the Northeast and parts of Canada were caught off guard when they couldn’t log on to their computers on Tuesday morning and truckers were told the company would no longer pick up.
A former LandAir employee, who spoke to FreightWaves on condition of anonymity, said the company’s customer service and sales teams were the first to be laid off on Tuesday. Management notified truckers and service center staff via a Zoom video call around 4 p.m. EDT Tuesday that they no longer had jobs and the carrier was winding down operations on Friday, the source said.
At press time, William M. Keresey III, chief executive of LandAir, did not respond to FreightWaves’ repeated requests for comment on the shutdown.
Curtis Garrett, chief strategy officer of Reconex, headquartered in Englewood, Colorado, said sources told him on Tuesday that LandAir’s private equity firm had made the decision to disconnect and shut down the LTL carrier.
The company, owned by a private equity firm Corbel Capital Partners, headquartered in Los Angeles, has yet to release a statement on the shutdown. Brian Yoon, principal of Corbel Capital Partners, did not return FreightWaves’ request for comment.
In a statement, Kyle Thweatt, spokesperson for the Vermont Department of Labor, confirmed late Thursday that the agency is aware of the situation at LandAir but “has not received notification from the company” regarding the closure.
According to the Vermont Joblink database, LandAir had not filed Worker Adaptation and Retraining Act (WARN) notice with the State of Vermont prior to the sudden closure. Vermont requires all employers closing or mass laying off 50 or more employees to provide 45 days notice prior to the effective date of a closure or layoff.
Federal law also requires most employers with 100 or more employees to provide at least 60 day written notice of impending closure.
The 54-year-old trucking company, North East Freightways, doing business as EarthAir, had 135 pilots and 148 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website. The company, originally called Allied Air Freight, was founded by Fred Spencer in 1968.
According to LandAir’s website, the hazardous materials carrier had 450 employees at 11 service centers in the United States, as well as service centers in Ottawa, Ontario and Toronto. In May, the company announced that it was expanding its LTL service offerings to include New Jersey, Long Island and New York.
LandAir is not associated with Landair Holdings, based in Greeneville, Tennessee, including Landair Transport and Landair Logistics, which was acquired by Covenant Logistics Group, Inc. (NASDAQ: CVLG) in July 2018.
Management knocked LTL carrier ‘into the ground’
Sources say Keresey, who was brought on board three years ago by Corbel Capital to “right the ship”, did the exact opposite and claimed he and other executives “stood the LTL carrier in the floor”.
“We all saw it coming since they [Corbel] bought the company three years ago and Will [Keresey] was named CEO,” a former LandAir employee, who did not want to be identified, told FreightWaves. “We haven’t been financially stable for two years and have tried to stay afloat by not paying suppliers.”
Service disruptions due to driver and employee turnover led customers to leave LandAir for other LTL carriers, former employees said.
“From last March until around September, LandAir was so supported due to the loss of long-time employees that they had cargo for months and found cargo that had been missing for a year or more,” said a former employee. “Customers were calling every day screaming because their freight had been lost.”
A former LandAir employee describes the North East-based LTL carrier’s work culture as “complete chaos”.
“I couldn’t get any equipment repaired or find someone to maintain our fleet because we were way over our credit limit and weren’t paying our suppliers,” said a former employee, who doesn’t did not want to be identified for fear of reprisals. Freight Waves.
After leaving another LTL carrier in 2019 to work for LandAir, a former truck driver said she could tell from “day one that the company was mismanaged”.
“The customer service was poor, the equipment sucked and there wasn’t a good driver vibe,” the truck driver said. “They had about a 100% turnover rate. The people I started with have been replaced more than once.
Private equity firms don’t understand LTL
Garrett said most private equity firms don’t understand the LTL industry, which is very different from truckload carriers.
” You have to be patient. It’s a long game,” Garrett told FreightWaves. “You can’t make money overnight because it’s so capital intensive. There’s so much overhead and when you look at all the things that have gone up lately like fuel, labor, real estate costs, it’s all hit LTL carriers hard.
Craig Fuller, CEO of FreightWaves, agreed.
“Private equity firms have a poor track record of successfully owning asset-based trucking businesses,” Fuller said. “Running a trucking business is a very complicated business and is not for tourists trying to make a quick buck.”
Fuller’s suggestion to private equity firms considering buying a trucking business because cash flow looks attractive during the up cycle is to “resist the temptation.”
“The industry is cyclical and will destroy you,” Fuller said. “When times are good, it becomes almost impossible to find drivers. When times are tough, it becomes nearly impossible to find high paying freight and volume to fill your trucks. »
It is unclear whether LandAir was actively seeking a buyer at the time of the closure. Garrett said the company would have been bought out a year ago when the freight market was booming, but “the company’s window of opportunity was missed.”
Garrett said he spoke to some LTL carriers interested in potentially hiring some of LandAir’s drivers as well as purchasing equipment and terminals the company operated in the northeast.
“It’s very expensive to run a trucking business in the Northeast,” Garrett told FreightWaves. “And with the rising costs of labor, workers and drivers, the high cost of living in this part of the country and the uncertainty in the freight market being what it is, it’s a difficult time.”
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