Central Freight Lines Closing After 96 Years: Exclusive Report

Exclusive: Central Freight Lines to shut down after 96 years

Central Freight Lines will begin winding down operations Monday after nearly a century in business, ending the run of one of the country’s oldest regional less-than-truckload carriers.

The Waco, Texas-based company notified employees, drivers and customers of the decision over the weekend. Central Freight said it will stop accepting new shipments Monday and expects to deliver substantially all freight already in its system by Dec. 20.

The closure will affect more than 2,100 employees, including approximately 1,325 drivers. About 820 employees are based at the company’s headquarters in Waco. The company operated roughly 1,600 power units and had 65 terminals before deciding to shut down.

“It’s just horrible,” Central Freight President Bruce Kalem told FreightWaves.

Kalem said years of operating losses had depleted the company’s liquidity. A source close to the carrier said Central Freight had accumulated too much debt and too many unpaid bills to continue operating, despite efforts to find a way forward.

“Years of operating losses and struggles for many years sapped our liquidity, and we had no other place to go at this point,” Kalem said. “Nobody is going to make money on this closing, nobody.”

In a statement, Central Freight said its liabilities far exceeded its assets, which were subject to liens held by multiple creditors. The company said it had been unable to secure financing for continued operations, find a buyer for the entire business or obtain funding for a Chapter 11 reorganization.

The carrier has not announced whether it will file for Chapter 7 bankruptcy or liquidate outside of bankruptcy. However, sources familiar with the company said Central Freight does not plan to reorganize.

The immediate priority is completing deliveries. Central Freight said it is working with key customers and vendors and expects to have enough liquidity to complete the remaining freight in an orderly manner. Kalem said fuel cards were still working late Saturday and that drivers would be paid for freight hauled through the completion of the wind-down.

Central Freight said it is negotiating the sale of a substantial portion of its equipment. It also is coordinating with other regional less-than-truckload carriers to help employees apply for jobs in their areas. The company cautioned that no asset purchase or employment offer had been guaranteed.

Kalem said he was aware of a large carrier interested in hiring many Central Freight drivers, although he could not identify the company. He also said the carrier was working to help employees find new positions during the limited time remaining.

“I’m going to work feverishly with the time I have left to get these good people jobs — I owe it to them,” Kalem said.

The shutdown follows a series of efforts to stabilize Central Freight. Nearly a year ago, owner Jerry Moyes joined the company’s executive leadership as interim president and chief executive officer. Moyes remained CEO after Kalem became president in July.

Those efforts did not produce a buyer for the complete network. One source said potential buyers had shown interest in individual portions of the company but not in acquiring the entire operation. The carrier’s broad footprint may have limited interest from companies that already had terminals and employees in some of the same markets.

Central Freight had also been evaluating its terminal network. FreightWaves received information that the company was not renewing leases at some East Coast locations. Another source said several West Coast terminals had recently been sold, although the reason for those transactions was not disclosed.

The carrier’s financial difficulties also came despite receiving $10 million through the federal Paycheck Protection Program during the early stages of the COVID-19 pandemic. Central Freight was one of four trucking-related companies to receive the program’s maximum award. Kalem said the funds were used for payroll.

Employees and drivers had taken pay cuts in recent years, according to Kalem. He said much of the reductions was later restored and that pay had been increased in the months before the shutdown, but the changes were not enough to attract and retain the drivers the company needed.

Central Freight Lines was founded in Waco in 1925 by Woody Callan Sr. The company began with regular Texas routes connecting Dallas, Fort Worth and Austin before expanding across the South and eventually into a broader 48-state network. Its history included periods of expansion, ownership changes and acquisitions of regional carriers.

The closure is expected to be the largest trucking company shutdown since Celadon ceased operations in 2019. For drivers and freight customers, the loss removes a long-established regional carrier from an LTL market already dealing with capacity, labor and financial pressures.

Central Freight said its decision was intended to provide the safest and most orderly wind-down possible while maximizing the funds available for creditors and other obligations. The company thanked its employees, customers, vendors and equipment providers for their support during its 96 years of operation.