The sudden collapse today of trucker and broker New Century Transportation Inc., will tighten up an already taut market for truckload capacity in the critical Northeast region where the carrier had built a solid niche, according to interviews with various market observers.
New Century, based in Westampton, N.J., in central New Jersey's Burlington County, closed its doors and plans to liquidate assets under Chapter 7 of the federal bankruptcy code. Rumors of New Century's imminent passing became the fodder for online trucking boards late last week. However, as late as yesterday the company hoped it could strike a financing arrangement to keep it in business.
Estes Express Lines, a less-than-truckload (LTL) carrier based in Richmond Va., will move the freight still in New Century's pipeline. Estes will also get first crack at New Century's driver pool. However, Estes will not acquire New Century, according to industry observers.
The end came after New Century's parent, investment firm Jeffries & Co., walked away from the company, leaving it to New Century and its two lenders to try to recapitalize its balance sheet, observers said. The plug was pulled after it became clear that a deal with neither lender could be consummated, these observers said.
The shutdown comes as the truckload market struggles through an extraordinarily tight market for capacity. June in particular is shaping up as one of the toughest markets for rig and driver supply in a very long time, according to industry observers. The shuttering of New Century, which operated 2,000 power units offering dry van and refrigerated services, among others, is likely to exacerbate the problem, industry observers said.
New Century was founded in 2000 by Harry Muhlschlegel after Muhlschlegel sold his prior firm, the now-defunct Jevic Transportation, to the old Yellow Corp. in 1999. It was profitable in 2012 but fell into the red in 2013. Observers blamed last year's problems on the company's inability to attract and retain enough drivers, which forced it to rely more heavily on costly purchased transportation.
The carrier made no mention of the shutdown on its website other than to publish a page listing phone numbers for employees to call if they need assistance. New Century employed about 1,500 people. It generated about $300 million in annual revenue, about $250 million of which came from its Northeast operations. It also ran a small Denver-based Western regional trucker called Western Freightways as well as a brokerage division. Together, those two units comprised the balance of the annual revenue.
Although New Century clearly had its problems, it did not fit the mold of an operationally crippled trucker. In fact, observers said, New Century had a relatively unique operating model. Outbound from Westampton, N.J., its only facility, it operated a so-called partial truckload service within a 150- to 200-mile radius that included the New York City and Philadelphia metro areas. The outbound service handled larger LTL consignments on a multistop basis. The inbound service was a full truckload operation destined for Westampton.
Many users, especially third-party logistics firms, relied heavily on New Century's services for LTL traffic. Third-party firms accounted for about half of New Century's LTL business, observers said. The outbound service was prized in a region that is heavily tilted toward inbound traffic and capacity, observers said. New Century was considered a reliable operator, they added.