Central Freight Lines Ends 96-Year Run, Shuttering Operations

Exclusive: Central Freight Lines to shut down after 96 years

Central Freight Lines, a Waco, Texas-based less-than-truckload carrier, planned to begin winding down operations in December 2021 after nearly a century in business, according to company officials. The closure affected more than 2,100 employees, including approximately 1,325 drivers, and made Central Freight the largest trucking company to shut down since Celadon ceased operations in 2019.

Central Freight President Bruce Kalem said the company would stop accepting new shipments and work to deliver substantially all freight already in its system by Dec. 20. The carrier operated approximately 1,600 power units and had 65 terminals before the shutdown decision. About 820 employees were based at the company’s Waco headquarters.

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

A source familiar with the company said Central Freight had accumulated too much debt and too many unpaid bills to continue operating. The company said its liabilities substantially exceeded its assets, which were subject to liens held by multiple creditors.

Central Freight said it had considered several alternatives, including securing additional operating funding, selling the entire business and pursuing a Chapter 11 reorganization. None of those options came together. The company said its remaining resources were limited and that a safe, orderly wind-down was the best available path.

The company’s ultimate legal course remained uncertain. A source familiar with the situation said Central Freight could file for Chapter 7 bankruptcy or liquidate outside of bankruptcy. The source also said the LTL carrier did not plan to reorganize.

For drivers, the immediate concern was completing deliveries and receiving pay for work already performed. Kalem said fuel cards remained operational and that drivers would be paid for freight they hauled until the company completed its final deliveries. Central Freight said it expected to maintain enough liquidity to finish the freight in its system in an orderly manner.

The company also said it was negotiating the sale of a substantial portion of its equipment. It was coordinating with regional LTL carriers to help employees apply for other jobs in their areas, although the company emphasized that no asset sale or employment offer was guaranteed.

Kalem said he was aware of interest from at least one large carrier in hiring many Central Freight drivers but did not identify the company. Central Freight later said Estes Express Lines was interested in hiring some of its drivers and employees.

Third-party logistics provider GlobalTranz removed Central Freight as a carrier option to prevent new bookings. The decision reflected the broader impact of the shutdown on shippers, customers and freight providers that depended on the carrier’s network.

Central Freight’s closure followed a period of financial and operational pressure. The company reshuffled its executive team nearly a year earlier in an effort to remain in business. Owner Jerry Moyes became interim president and chief executive officer, and remained CEO after Kalem was promoted to president in July.

According to sources cited by FreightWaves, the company had been exploring ways to reduce its financial burden and preserve operations. Some terminal leases reportedly were not renewed, while some West Coast terminals had been sold. Central Freight also held discussions with customers, vendors and potential buyers, but no purchaser emerged for the entire company.

One challenge for potential buyers was the size and geographic reach of the network. Central Freight had expanded over the years through acquisitions and served a broad territory. A source said some prospective buyers were interested in individual pieces of the business but did not need locations or employees in markets where they already had operations.

Central Freight’s financial problems also came despite federal pandemic assistance. During the early stages of the COVID-19 pandemic, the company received a $10 million loan through the U.S. Small Business Administration’s Paycheck Protection Program, one of four trucking-related companies to receive the program’s maximum award. Kalem said the money was used for payroll.

The company had also implemented pay cuts during the previous several years, according to the information provided. Kalem said some of those reductions were later restored and that pay had increased in the months before the shutdown, but the changes were not enough to resolve the company’s financial difficulties or attract enough drivers.

Central Freight Lines was founded in Waco in 1925 by Woody Callan Sr. It began with regular routes between Dallas, Fort Worth and Austin and expanded over subsequent decades across the central and western United States. The company later acquired several regional carriers and broadened its network to include markets ranging from the Southeast to the West Coast.

In its closing statement, Central Freight thanked its workforce, customers, vendors and equipment providers. The company said its priority during the final weeks would be completing the wind-down, supporting employees and maximizing the funds available to meet its obligations.