New England Motor Freight, a trucking company that handles small shipment loads, including through a terminal in Scarborough, filed for Chapter 11 bankruptcy protection on Monday for itself and 10 affiliates.
The company, based in Elizabeth, New Jersey, filed the voluntary bankruptcy petition in U.S. bankruptcy court in Newark.
It plans to use the Chapter 11 proceedings to wind down its operations.
It’s withdrawal from the market could increase trucking prices in Maine, an industry expert said.
“Shippers need to be prepared that the rates they pay to other carriers may be at a premium,” said Satish Jindel, president of SJ Consulting Group, an industry research group in Warrendale, Pennsylvania.
The manager of the Scarborough location on Wednesday referred calls to the company’s president, who did not immediately respond. The company’s lawyer also was not immediately available for comment.
“We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting the industry are significant,” Vincent Colistra, chief restructuring officer for the company, wrote on the company’s website.
The company focuses on freight hauling that combines small loads from different customers on each truck. That trucking sector overall has grown this year, according to the American Trucking Association and FreightWaves, at the same time the family-owned company struggled.
The company is the ninth-largest private carrier in the small load market sector and 19th when including public trucking companies, Jindel said.
Its revenue declined from $402 million in 2017 to $350 million in 2018, a drop Jindel attributed to issues with a union contract.
“They were faced with challenges of having a union that had a contract. The cost and work rates imposed a high cost on the company,” he said. He expects the company to wind down operations within days.
“The hauling drivers were not picking up freight because they were unhappy with the contract, and there were customer losses,” he said.
With the company going out of business, that means one less option for shippers, who Jindel said should expect higher costs for transportation.
New England Motor Freight owes between $50 million and $100 million to creditors, according to the bankruptcy filing. Among the top debtors are J.P. Morgan Chase and TD Bank.
The company has from 200 to 999 creditors, including financial institutions, fuel companies and a pension fund.
Its estimated assets are between $100 million and $500 million.
Company Chairman Myron P. Shevell is the father-in-law of musician Paul McCartney, according to The Wall Street Journal.
