Another LTL carrier closes its doors

Michigan’s Alvan Motor Freight cites fuel prices, declining demand

by Dave Hannon -- Purchasing, 7/2/2008 9:00:00 AM

Alvan Motor Freight had seen a lot of market trends in its 67 years of operations as a less-than-truckload carrier based in Kalamazoo, Mich. But the latest “perfect storm” of declining trucking demand, record high fuel costs, a strike at a major automotive-industry customer and tighter credit markets was just more than the 500-employee firm could bear. This week, it filed Chapter 11 bankruptcy and announced it was closing its doors.

According to a statement, Alvan cites several factors for its demise,  including the 87-day strike at automotive supplier American Axle, which Alvan calls one of its top customers. “The resulting trickle-down effect that slowed and/or stopped automotive production was deadly.” The company’s CEO James Van Zoeren, whose family founded the company in 1941, said he tried to find a buyer for the LTL carrier, “but just couldn’t find any takers.”

While the news of another LTL carrier filing bankruptcy is not a surprise in today’s market, it is yet another reminder to freight and logistics buyers to keep close contact with carriers struggling with fuel and demand. With the national average diesel price this week sitting at $4.65/gallon, according to the Energy Information Administration, more than $1.81 higher than a year ago, many trucking firms—big and small—are feeling the pinch.

Last week, JHT Holdings, a holding company for several automotive industry trucking firms, announced a restructuring under Chapter 11 but plans to continue operations. The week before that New York-based flatbed steel hauler Path Truck Lines shut its doors. And the biggest filing lately has been Jevic Transportation which shut down in May.