Central Freight lays off nearly 700 as it closes plants
Central Freight Lines plans to lay off nearly 700 people in Texas, including 162 in Houston, as it winds down its operations despite soaring demand for trucking.
The Waco company said it stopped picking up new shipments last week and planned to complete its last deliveries this week. Citing mounting debt — even as demand for trucking spikes in an e-commerce boom driven by the pandemic — it said it is in negotiations to sell its equipment and is attempting to coordinate job opportunities for its employees.
Central Freight will close its plant on Mesa Road by Dec. 31, the privately held company said in a letter to the Texas Workforce Commission. "The company explored all available options to keep operations going,” Bruce Kalem, Central Freight’s president, said in a statement. “However, operating losses sapped all remaining sources of liquidity, and the company's liabilities far exceed its assets, all of which are subject to liens in favor of multiple creditors.”
Founded in 1925, Central Freight deals in the less-thantruckload business, handling relatively small loads, allowing multiple clients to take up space in the same truck. Unable to find a buyer or to fund a Chapter 11 reorganization, it was left without options, Kalem said. The company also cited “workforce attrition” and “decreasing margins” as sources of strain in letters to the Texas Workforce Commission.
In addition to the 162 layoffs in Houston, another 511 people will lose jobs in Fort Worth, Waco and San Antonio, according to notices filed with the workforce commission.
The federal law that requires notice of mass layoffs calls for companies to file 60 days in advance. Central Freight only filed last week for job losses that will come at the end of the year. The company said the short notice was necessary as earlier warnings would have compromised potential sources of capital that might kept it in operation.
“(Central Freight) reasonably and in good faith believed that earlier notice would have jeopardized its efforts to obtain the financing and new business it was actively seeking in an effort to avoid or postpone this facility closure,” the company said in its letter to the Texas Workforce Commission.