Two more logistics companies shut down! Layoffs, closures, bankruptcies coming?

Recently, Meadow Lark Transport Inc., a veteran logistics company with a 40-year history in Montana, Canada. The shutdown was announced, causing nearly 275 employees to lose their jobs. U.S. supply chain solutions company SELSCS also announced the winding down of its operations.

Meadow Lark is a 40-year-old third-party logistics company in the United States, founded in 1983 by Rick and Donna Jones. The company is asset-based and has 40 locations across the United States with revenues of more than $200 million. In 2011, their daughter Amanda "Mandy" Roth bought the company from her parents.

Recently, however, Meadow Lark has faced a series of problems. According to the Federal Motor Carrier Safety Administration's SAFER website, the company had 273 drivers and 337 trucks at the time of the shutdown. FMCSA data shows that the company's broker authorization was involuntarily revoked on Aug. 15, and its contract carrier authorization will be revoked on Oct. 28.

Some of the car haulers who mediate goods for Meadow Lark claim they have been fighting for months to get paid. In June 2022, a former truck driver for Meadow Lark filed a lawsuit seeking a class action against the company's rental driver business plans. The lawsuit alleges that Meadow Lark failed to disclose material facts about the economics of its rental program, and that drivers often received little or no compensation after paying for truck leases, fuel, maintenance and other expenses, and sometimes owed Meadow Lark money despite working long hours as drivers.

In addition, the drivers allege Meadow Lark failed to pay them "75 percent of the actual gross revenue it promised to receive from customers," according to court documents. The allegations have raised questions about Meadow Lark's economics and operating model.

While it's unclear why the company was forced to shut down, the existence of these issues makes Meadow Lark's future even more unclear.

In recent weeks, Dennis Martin, CEO of SEL Supply Chain Solutions (SELSCS) in Fort Worth, Texas, and his team have been winding down the company's operations and working with banks to secure all the receivables that have been promised to be paid and working with banks to hopefully pay out to carriers.

Dennis Martin has worked in the transportation industry for 26 years, and for the past 12 years he has been at the helm of the logistics company he founded and ran in 2011. Martin said: "I am very sorry for the significant reductions in rates and volumes that carriers and their families have experienced this year. I hope we can pay them what they deserve." Martin is also working with another logistics company to hire independent agents and other employees. It also plans to sell the company's headquarters in Fort Worth in another attempt to pay carriers owed money for hauling cargo from SELSCS. Dennis Martin told reporters that $700,000 worth of merchandise was stolen in Las Vegas at the start of the year, and "it's been all downhill since then."

"It starts with $700,000 worth of stolen goods, and then insurance goes up and costs go up." "Martin said. "After a solid year in 2022 that generated $64 million in revenue, this year we lost 40 percent of our business for some reason." The death knell for the company's freight business was sounded when banks began imposing limits on the company's daily liquidity needs. "Banks change their needs every day, and for various reasons we can't reach an agreement with the banks on their day-to-day cash flow needs." At its peak, the company had 125 people involved in SELSCS daily operations, including 45 independent freight forwarders and a back-office support team in Honduras, Martin said. "Every year in this business is challenging, but this year has been without a doubt the most challenging year I've faced, not only have we faced double underwriting fraud, cargo theft, carrier identity theft, but also our rate confirmation being forged and sent to the carrier and then receiving a phone call from the carrier demanding payment," he said. But they didn't actually transport our goods. They were cheated." "Martin said.

Martin originally founded Smith Eagle Logistics, but changed the name of the company to SELSCS in March 2022. The company provides third-party logistics services for refrigerated truck, dry truck and pallet truck shipments throughout the United States and Mexico. Some of his major customers include Home Depot (HD), Kraft Heinz (KHC) and Mike's Hard Lemonade. "It's a cyclical industry and I did everything I could to keep the company going because the last thing I wanted to do was close down, but with the forces of the market, not everyone can survive." "I've been in this business for 26 years, and there hasn't been an easy day," Martin said.