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European Carrier Suddenly Shut Down By Parent Company

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European Carrier Suddenly Shut Down By Parent Company

Transfreight Automotive Logistics Europe, a cargo hauler based in the U.K., has been placed into members' voluntary liquidation by its parent company, Yusen Logistics. The filing was made on July 12, 2019, according to U.K. government documents on Companies House, the official government registry of companies.

Motortransport.com reported the company had approximately 90 commercial vehicles and 200 trailers, operating out of Burnaston, Derby, England.

According to U.K. law, members' voluntary liquidation allows a company to pay its debts but shut down operations. A notice of liquidation was published in the official U.K. record, The Gazette, on July 24, 2019. It noted the company intended to pay off all creditors within two months of August 30, 2019.

KPMG Restructuring in London is handling the liquidation.

Transfreight's biggest customer was the Toyota Motor Manufacturing plant in Burnaston, something that attracted Yusen Logistics to the company in 2017. Both companies shared Toyota as a customer. Yusen acquired Transfreight that year for an undisclosed sum.

"This business offers an excellent fit for Yusen Logistics, with shared customers and service offerings, but with a regional focus which complements Yusen's infrastructure," Ian Veitch, chief regional officer for Yusen Logistics Europe said at the time.

Both companies offered cross-docking, transport and manufacturing plant logistics. Yusen saw the acquisition as a way to expand its footprint in France as well as building a larger infrastructure of freight consolidation points in Western Europe, it said.

Earlier this year, Toyota warned that a no-deal Brexit could result in a suspension or even closure of its U.K. auto plants, including the one in Burnaston, due to expected lengthy delays in customs checks for parts coming from other European countries. Toyota's plants operate on a just-in-time inventory schedule.

"If even one component does not arrive, we will be forced to halt production," Shigeki Tomoyama, an executive vice president with Toyota, told the Nikkei Asian Review.

It is unclear if uncertainty due to Brexit played any role in the Transfreight shutdown. The notice of Transfreight's liquidation did not specify a reason for the closure.

Even as it was shutting down Transfreight, though, Yusen was expanding. The company announced a new branch office in Koper, Slovenia. Yusen said the expansion in Koper will allow it take advantage of a growth in ocean freight in the region. The Koper port handles the largest volume from three Adriatic ports where volume has doubled in the last 10 years, and runs 62 trains in the region daily, it said.

Fleet shutdowns growing

In the U.S. carrier closings have become more common as economic conditions have wavered.

On July 30, Terrill Transportation of Livermore, California, ceased operations. That fleet had 30 trucks and 36 company drivers as well as 12 owner-operators. Schneider National (NYSE: SNDR) announced it was shutting down its First to Final Mile business due to a lack of profitability. That shutdown put nearly 800 drivers out of work.

Three of the largest closures so far in 2019 have been New England Motor Freight, Falcon and LME.

LME was a 400-truck less-than-truckload (LTL) carrier based in Minnesota. LME's shutdown may have been in part due to a National Labor Relations Board dispute related to Lakeville Motor Express, a carrier that shut down in 2016. The Board called LME the "alter ego" of Lakeville.

Falcon's shutdown was tied to alleged mismanagement, according to former executives of the company. Those executives told FreightWaves the company was struggling to meet payroll even after the sale to a private equity company.

New England Motor Freight's shutdown in February shook the Northeast LTL market. With roots going back 100 years, the nation's 19th-largest LTL carrier with more than 1,300 drivers had struggled financially for some time, but a shutdown was not expected. But on February 12, the company concluded that after two years of losses and the combination of high labor costs and a "severe" driver shortage made it unsustainable to continue as a going concern.

Image Sourced from Pixabay

Posted-In: Freight Freightwaves LogisticsNews Eurozone Global Markets General

 

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