The shipping and logistics industry has faced the Great Freight Recession since about March 2022 with major companies filing for bankruptcies and some ceasing operations.
Some recent reports claimed that the freight recession might be ending with rising truckload rates. Also, an increase in tender rejections to 6%, as reported by FreightWaves, may mean truckers are becoming more discriminating in choosing between multiple freight shipping requests.
💸💰 Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💸
That could also be a sign that economic conditions might have improved and the freight recession is winding down.
Related: Disasters force key energy company to file Chapter 11 bankruptcy
Despite some good economic news, trucking, shipping, and logistics companies continue to file for bankruptcy.
Major trucking and shipping services company KAL Freight on Dec. 5 filed for Chapter 11 protection to wind down failing affiliates and restructure its primary business. The Fontana, Calif.-based transportation and logistics company filed its petition after defaulting on debt owed to about 10 lenders.
Miami, Fla.-based Star Transportation PA and five affiliates filed for Chapter 11 bankruptcy on Nov. 1 to reorganize their businesses. The move came after one of the company’s lenders issued an order to repossess 47 of its trucks for which it had provided financing.
Some shipping companies filed for Chapter 7 liquidation
A couple of other shipping companies took drastic steps and filed for Chapter 7 liquidation to answer lawsuits and financial distress.
Illinois shipping company Mighty Move Transportation, which operated with 70 power units and 75 drivers, on Oct. 24 filed for Chapter 7 liquidation in the U.S. Bankruptcy Court for the Northern District of Illinois, facing two breach of contract lawsuits.
And Irving, Texas, logistics company Sunset Logistics and its affiliates on Oct. 3 filed for Chapter 7 bankruptcy to liquidate their assets and cease operations blaming a bad economy, low freight rates, and rising costs.
Image source: Shutterstock
SBB Shipping USA files for Chapter 11 bankruptcy
Finally, global logistics company SBB Shipping USA, which operates in North America, Asia, Europe, and North Africa, filed for Chapter 11 protection on Dec. 14 seeking to reorganize its business.
Related: Embattled home goods retailer plans to file Chapter 11 bankruptcy
The Lyndhurst, N.J.-based shipping company filed its petition in the U.S. Bankruptcy Court for the District of New Jersey listing $1 million to $10 million in assets and liabilities.
More bankruptcy stories:
- Another popular pizza chain files for Chapter 11 bankruptcy
- Popular vodka brand files for Chapter 11 bankruptcy
- Auto parts retailer dumps hundreds of stores, no bankruptcy yet
The debtor operates as a non-vessel operating common carrier providing global logistics services, including ocean freight, land transport, and e-commerce fulfillment solutions, serving multiple industries including the aerospace, automotive, healthcare, mining, electronics, construction, industrial and manufacturing, semicon and solar, oil and gas cargo, energy and chemicals, furniture and wood, and retail sectors.
SBB Shipping did not state a reason for filing for bankruptcy in its petition. However, shipping companies that filed for bankruptcy in 2024 have cited increased debt, rising interest rates, higher operational costs caused by rising inflation, and declining demand for shipping services as the reasons for their filings.
The debtor is a leading logistics supplier, providing ocean freight services, such as less container load, full container load, intermodal solutions, and project cargo operations; and land transport, including less truck load, full truck load, multimodal solutions, and intermodal solutions.
The company also provides third-party logistics and fulfillment, which includes warehousing and storage, inventory management, real-time order receiving, and value-added services, according to its website.
Related: The 10 best investing books (according to stock market pros)
