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Family-owned Beaver Express Services of Woodward, Oklahoma, notified drivers and employees on Monday that the less-than-truckload (LTL) carrier is ceasing operations after 77 years.
Mike Stone, president of Beaver Express, told FreightWaves that the coronavirus outbreak, soaring insurance costs and oil prices plunging to around $32 per barrel in March was the "perfect storm" that forced the company to wind down operations.
He admits the company has been struggling for about two years. Stone said he explored every avenue to stay afloat or find another LTL carrier willing to buy the company, but failed to find one in time.
"My grandfather helped start this business in 1943 and I am part of the third generation involved in operating the company, so this isn't a decision I came to lightly," Stone told FreightWaves late Sunday.
Stone sent a letter to customers on Saturday alerting them of the company's plan to wind down operations. After it makes its last deliveries this Thursday, Stone told customers the company had worked out an arrangement with Old Dominion Freight Lines "in an effort to minimize the impact" of the company's decision to close.
"We have negotiated an arrangement with Old Dominion Freight Line, Inc. to handle your outbound shipments effective Wednesday, March 25," Stone said in the letter. "Old Dominion Freight Line is not acquiring any assets or assuming any liabilities of Beaver Express.
As the company winds down operations, a skeleton crew will work to collect the company's outstanding receivables, Stone said.
Beaver Express had around 160 drivers and 218 power units, according to the Federal Motor Carrier Safety Administration SAFER website. Stone said the company has approximately 10 owner-operators and around 100 part-time and full-time independent contractors who mainly delivered in rural areas in the five-state region where the company operated.
The company hauled oilfield equipment for Halliburton, but after oil prices dropped rapidly in March, business dropped dramatically.
"When oil dropped to $32 per barrel as Saudi Arabia and Russia were fighting over market share, it brought the oil and gas industry to its knees, including us," Stone said.
The company operated in Arkansas, Kansas, Missouri, Oklahoma and Texas, and operated 25 terminals in those states, which Stone said will be put up for sale or lease soon.
While business was picking up slightly because Beaver Express hauled medical supplies to hospitals, nursing homes and rehabilitation centers, all critical amid the coronavirus outbreak, Stone said the slight revenue bump occurred too late.
Stone said he was used to the cost of insurance rising 1-2% every year, but it spiked 8% in 2019.
Over the past 24 months, Beaver Express trucks had been inspected 144 times and 29 were placed out of service, according to the FMCSA data. Its drivers were inspected 176 times and four were placed out of service. Its trucks were involved in five crashes over the same two-year period.
Even though the company hauls LTL freight and its drivers return home every night, Stone said he was forced to comply with the federal electronic logging device (ELD) mandate to track hours truckers can legally drive.
"We didn't have an hours-of-service issue because of the way we structured our runs, but we had to buy and install the ELDs at a cost of around $5,000 per month, a cost that will never go away," he said.
"I've gone through the gamut of emotions from sad, to mad to frustrated, but we tried everything and in the end, things just didn't work out for us as we hoped," Stone told FreightWaves.
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