40 year old California trucking outlet Timmerman Starlite Trucking, Inc. is the latest victim in the “trucking apocalypse” and announced that it would be shutting down effective immediately, according to FreightWaves.
30 employees are expected to lose their jobs as a result. The company is based in a mid sized city about 100 miles east of San Francisco and had a fleet of 30 trucks, 150 trailers and 28 drivers.
The company’s owner cited “a tough freight market and environmental regulations” as reasons for the shut down. The company announced the shutdown on its Facebook page.
Owner Colby Bell said:
“We tried to provide a healthy work environment for our employees and give them the best wages and benefits we could. But in the end, the rates that were available did not support the cost structure needed to compensate our employees appropriately.”
Carriers have also been hit with rising costs and operational pressure over the past 2 years. Wage increases for drivers, combined with insurance renewal rates and more expensive equipment have made profitability a challenge.
Additionally, fuel rates have moved higher:
Fuel expenses, particularly in a tax- and regulation-loving state like California have also been way up in the past three years. Since Feb 2016, retail diesel prices in the state have increased from $2.29/gallon to $3.95/gallon, roughly equivalent to $.25 per mile. At $1.49 per mile, this will cost a carrier 17% of their operating profits if they aren’t on a fuel-surcharge program.
Larger carriers are able to recover most, if not all of this in the form of a fuel surcharge. Unfortunately, Starlite was likely too small to have much leverage of their shipper relationships to do so.
Recall, just days ago we documented that regional truck carrier LME “suddenly and abruptly” shut its doors.
The company is a regional carrier based in Minnesota that operated throughout the Midwest. The company had terminals in 30 locations across the U.S. and through interline agreements services all of North America. It also worked with major companies like 3M, John Deere and Toro.
The company reportedly included “over 600 men and women” and has been listed as having 382 power units and 1,228 trailers, with 424 truck drivers.