Central Freight Lines Closing After Nearly a Century in Business

Exclusive: Central Freight Lines to Shut Down After 96 Years

Central Freight Lines, the Waco, Texas-based less-than-truckload carrier, will begin winding down operations Monday after nearly a century in business. The closure is expected to affect more than 2,100 employees, including approximately 1,325 drivers, just days before Christmas.

President Bruce Kalem told FreightWaves that the company will stop accepting new shipments when the wind-down begins. Central Freight expects to deliver substantially all freight already in its system by Dec. 20.

“It’s just horrible,” Kalem said.

Central Freight’s closure makes it the largest trucking company to cease operations since Celadon shut down in 2019. The company operated 65 terminals and had approximately 1,600 power units before announcing the decision.

Years of losses left the company without liquidity

In a statement, Central Freight said it had explored every available option to continue operating. Those efforts included seeking additional financing, looking for a buyer for the entire company and attempting to secure funding for a Chapter 11 reorganization.

None of those efforts produced a workable solution. The company said continuing operating losses had exhausted its remaining liquidity and that its liabilities substantially exceeded its assets. The assets are subject to liens held by multiple creditors.

A source familiar with the company told FreightWaves that Central Freight had too much debt and too many unpaid bills to continue, despite efforts to keep the business open. Kalem acknowledged that years of operating losses had weakened the company’s financial position.

“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.”

Central Freight has not announced whether it will file for Chapter 7 bankruptcy or liquidate outside of bankruptcy. However, a source familiar with the company said there are no plans for a reorganization.

Drivers and employees face an abrupt transition

Central Freight said it is working with regional less-than-truckload carriers to give employees opportunities to apply for jobs in their areas. The company also said it is negotiating the sale of a substantial portion of its equipment, although no asset sale or employment offer has been guaranteed.

Kalem said he was aware that a large carrier was interested in hiring many Central Freight drivers, but he could not identify the company. He also said the carrier’s fuel cards remained active late Saturday and that drivers would be paid for freight they hauled through the delivery period.

“We are going to pay our drivers — that’s why we had to close it like we’re doing now,” Kalem said. “We are going to deliver all of the freight that’s in our system by next week, and we believe we can do that.”

Approximately 820 employees worked at Central Freight’s Waco headquarters. The closure will also affect terminal employees, mechanics, dockworkers, office staff and other workers across the company’s network.

GlobalTranz, a third-party logistics provider, notified customers that it had immediately removed Central Freight as a blanket and carrier-selection option to prevent new bookings.

Leadership changes could not reverse the company’s position

Central Freight reshuffled its executive team nearly a year before the shutdown. Owner Jerry Moyes was added as interim president and chief executive officer in an effort to stabilize the company. Moyes remained CEO after Kalem became president in July.

The company also pursued potential buyers. According to a source familiar with the process, some buyers showed interest in individual parts of Central Freight’s network but not in acquiring the entire business. The company’s broad footprint may have overlapped with existing operations maintained by potential buyers.

Central Freight had also faced changes involving 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 no reason for those transactions was provided.

Kalem previously said company executives were working under nondisclosure agreements to find alternatives and save the business. He said Moyes invested substantial money in the company, but the funding was not enough to overcome its financial problems.

A long-running carrier reaches its final days

Founded in Waco in 1925 by Woody Callan Sr., Central Freight began with regular Texas routes connecting Dallas, Fort Worth and Austin. The company later expanded throughout the South and Midwest, eventually receiving authority to operate across the 48 contiguous states.

Central Freight expanded through acquisitions and network growth over the years, including purchases involving Circle Delivery, DTI and Wilson. It also acquired Volunteer Express in 2020 and operated a broad regional and national LTL network.

During the early months of the coronavirus pandemic, Central Freight received $10 million through the Small Business Administration’s Paycheck Protection Program. Kalem said the money was used for payroll. Employees and drivers had taken pay cuts in previous years, although the company later restored much of the lost pay and increased wages.

Those steps were not enough to restore the carrier’s financial stability or solve its staffing challenges. Central Freight’s planned closure will remove a long-established LTL operator from the market and leave thousands of transportation workers looking for new employment as the holiday season begins.