CFL, A 96-Year-Old Freight Company, Just Went Under. The Scary Truth About the Future for Carriers.

CFL

If our headline seems melodramatic, that’s only because the news hasn’t covered this nearly enough. Central Freight Lines, also known as CFL, was founded in Waco, Texas in 1925. Nearly a century later in 2020, it won the title of Carrier of the Year from GlobalTranz. Yet, despite 96 years of excellence and expertise, just announced that they’re ceasing operation. 

CFL announcement
CFL’s announcement on their company’s homepage.

The logistics giant stopped picking up freight on December 13, and aimed to make all remaining deliveries by the 20th. While BYX is alive and well, the downfall of CFL is proof that no LTL carrier is immune to the effects of driver shortages and rapidly rising expenses. 

Where did CFL go wrong? 

Truth be told, it didn’t. The climate for logistics companies has turned increasingly volatile. The company’s announcement may come as a shock, but in reality, it came after years of struggling to remain profitable. Jerry Moyes, CFL’s owner, took up the reigns as CFL’s interim president and CEO in July, 2021 in an attempt to reduce expenses, pouring as much money into it as he could, but it simply wasn’t enough. 

CFL

CFL was one of just four logistics-related companies to receive the maximum award of $10 million through the Paycheck Protection Program during the pandemic. Every penny went to payroll, but staff members and drivers were still forced to put up with pay cuts to be able to afford to continue operation. They were none too thrilled, and the reduced pay wasn’t much of an incentive for new drivers to come on board. Even when CFL raised pay once more, they still struggled to attract enough drivers. 

That’s why we stand by our verdict that CFL did almost everything right. They paid their employees as well as they possibly could. They provided reliable services for decades on end. Yet, despite continuing to receive accolades for their quality work and customer service, they weren’t able to make ends meet. 

It’s like an experienced hiker exploring Everest. No matter how well he knows the terrain, it only takes one bad storm to take him down for good. Except in this case, instead of wind or snow, the storm involved a global pandemic, a serious driver shortage and sky-high expenses. CFL did make some risky acquisitions in the past several years, but even if they hadn’t, their road forward would have been tenuous.

The end result? 2,100 employees were laid off just days before Christmas.

We could say it’s not as bad as it sounds, but we’d be lying. Equipment is expensive, real estate is expensive and drivers need increasingly high wages to keep up with the painfully high cost of living. Meanwhile, customers resent and resist rate increases, putting pressure on an already unsustainable business model. 

CFL tried to sell, but no one was interested in purchasing the entire company. They just wanted specific parts, but dividing it up would have been far too complicated. In the end, it made more sense to try to phase out gracefully than to wait for a more disastrous crash. CFL continued paying drivers and delivering freight while working to sell off as much of its equipment as possible. The company also began coordinating with regional LTL carriers to help some of their long-term employees find new employment. 

Freight companies can’t go on like this, and they shouldn’t have to. 

No one wants to lay off thousands of employees. When you’re struggling to stay afloat, however, that’s the kinder option. For BYX and other freight companies, what happened to CFL is a warning sign. 

Raising prices is a necessary evil; BYX is implementing on average, a 7% price increase (based on specific customer analysis) starting in January 2022. Historically, however, customers have been reluctant to accept shipping increases. They’re business owners too, and elevated shipping costs are a challenge for them as well. We get it, but without a price increase, there’s a possibility that BYX could eventually follow in CFL’s ill-fated footsteps. 

Our request? Embrace change, because it’s here.

Raising prices isn’t pleasant for us either, but we’d prefer to raise our prices slightly than to offer slower service from less experienced drivers. We’re grateful that our customers understand that we’re not raising prices for our own personal gain, but rather to better serve them in the long term. 

The small increase is what will allow us to continue paying our drivers fairly, operate efficiently, and provide our customers with the best logistics experience out there. As usual, please direct any questions to our customer service experts, and we’d be happy to help however we can.

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