New England Motor Freight (NEMF) shocked the trucking industry on Monday afternoon by announcing that they were abruptly filing for Chapter 11 bankruptcy and shutting down operations.
In a press release, the company blamed declining margins caused by the rising cost of labor, regulations, and equipment, as the primary factor for the shut down.
NEMF president Thomas W. Connery wrote the following letter, which was distributed to employees on Monday.
To The Workers of NEMF:
It is with a heavy heart that I am writing this letter to inform you of our intent to undertake a wind down and liquidation of our company, New England Motor Freight.
The costs of running an asset based trucking company have soared; with labor and benefits consuming an ever large portion of revenue. Add in the high cost of equipment, a severe industry shortage of drivers, ever increasing regulations and tolls, technology investments and the overall risk environment of our business.
After much discussion as well as consultation with outside financial advisors, it was concluded that it does not make sense to continue operations to support a business in which our margins continue to shrink, thereby resulting in significant financial losses.
No one is more devastated than our Chairman Myron “Mike” Shevell and his family, namely Nancy, Susan and Zachary. They built this company by walking hand in hand with thousands of dedicated workers like yourself. To all of our co-workers, many of whom are dear friends and to our thousands of customers, the family extends sincere gratitude and they share in our collective sorrow that we could not continue to operate this great enterprise.
Our cooperate offices and human resources department will provide further information today as we move forward with the wind down.
Thomas W. Connery
President and Chief Operating Officer
A copy of letter began circulating social media shortly after the announcement and can be seen below.
Last year NEMF ranked as the 17th-largest LTL carrier in the U.S. with revenue over $400 million.
NEMF’s 10 subsidiary companies, including truckload carrier Eastern Freightways, will also be shutting down.