Huge shipping firm shuts down two of its companies

The U.S. logistics industry continues fighting through financial difficulties this year, as several shipping companies have already filed for bankruptcy in 2024.

Filing bankruptcy was a way for J.J. & Sons Logistics of Clint, Texas, to avoid litigation and a possible expensive judgment. On Jan. 22, the company filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Western District of Texas four days before the scheduled start of a trial for a wrongful death lawsuit filed by the family of a former company truck driver who had died from drowning in 2016.

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Another logistics company, California-based Wise Choice Trans Corp., shut down operations and filed for Chapter 7 liquidation on Jan. 4 in the U.S. Bankruptcy Court for the Northern District of California to trigger an automatic stay against all legal proceedings, as the company listed its involvement in four legal actions that were ongoing or concluded.

Carlsbad, Calif., freight forwarder company Boateng Logistics permanently shuttered its operations and on Feb. 22 filed for Chapter 7 bankruptcy with plans to liquidate. The company filed its petition before any creditors could take legal action, as court papers said it owed millions of dollars in liabilities to trucking, logistics and factoring companies.

Companies don't always have to liquidate in bankruptcy

In some cases, a company doesn't need to file Chapter 7, liquidate and close down operations. A Chapter 11 reorganization might be sufficient.

Nationwide Cargo Inc., a general freight trucking company that also hauls fresh produce and meat, filed for Chapter 11 bankruptcy on March 13 in the U.S. Bankruptcy Court for the Northern District of Illinois to reorganize its business.

The East Dundee, Ill., shipping company, which operates with 183 trucks and 171 drivers, said funds will not be available to pay unsecured creditors.

While bankruptcy is often a last resort for logistics companies having financial difficulties, in some cases, downsizing operations without filing bankruptcy can be a remedy for solving problems with high costs and expenses. Shutting down certain subsidiaries is a method for eliminating financial burden that one big shipping company has chosen.

Universal Logistics closes 2 subsidiaries   

Major shipping company Universal Logistics Holdings  (ULH)  will permanently close two of its subsidiaries and lay off 677 employees, notices filed with the State of Michigan said, according to FreightWaves.

The Warren, Mich., company's subsidiary Universal Dedicated of Detroit will close and lay off 230 truck drivers, while Logistics  Insights Corp. will shutter and lay off 447 workers, including 164 warehouse workers, 212 forklift operators, 26 dock workers and 45 clerical employees. Universal Logistics gave no reason for shutting down the two subsidiaries.

Logistics Insights provides value-added logistics solutions to the automotive, aerospace, manufacturing and retail industries, as well as dedicated truckload, expedited and freight forwarding services to customers throughout North America, according to the Universal Logistics website. Universal Dedicated of Detroit operates an auto parts warehousing and logistics facility. Both subsidiaries are based in Detroit.

Parent company Universal Logistics Holdings, whose subsidiaries employ about 10,000 workers in total, is a holding company which owns subsidiaries that provide a variety of customized transportation and logistics solutions throughout the United States and in Mexico, Canada and Colombia. Its subsidiaries offer a broad array of supply chain services, including truckload, brokerage, intermodal, dedicated and value-added services.