Lessons from the NEMF Bankruptcy

Picture of NEMF truck from NEMF Facebook Page

Lessons from the NEMF Bankruptcy

NEMF Bankruptcy

New England Motor Freight (NEMF), based in Elizabeth, New Jersey, and headed by Myron Shevell, has been in the trucking business since 1918. One of the top less-than-truckload carriers in the nation (#67 on the CCJ Top 250 List), NEMF was purchased by Mr. Shevell in 1977. On February 11, NEMF shocked the transportation world announcing on their website that the company along with ten related entities, “have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code.”

Citing two years of significant losses and oppressive contracts, Vincent Colistra, a Senior Managing Director with Phoenix Management Services, Inc., and Chief Restructuring Officer for the Company, said, “We have worked hard to explore options for New England Motor Freight, but the macro-economic factors confronting this industry are significant.”

What does this mean for shippers going forward?

Here at Blue Eagle Logistics, we are always sorry to see a business shut down. NEMF had a strong presence in the Lehigh Valley with a location in Allentown. With over 1700 drivers, the NEMF shutdown will create significant hardships for those affected. The human cost is hard to define. And yet, we are glad that the Lehigh Valley continues to be a great place to do business. Watching the valley reinvent its economy in the past few years has been a great pleasure. The distribution boom has created many opportunities–we’ve come a long way since Billy Joel’s hit song, “Allentown.”  

It’s important to take a hard look at the NEMF story, what factors contributed to it, and how to learn the lessons it has to tell. The NEMF bankruptcy highlights the fact that despite a strong economy, trucking remains a very competitive business.  The driver shortage along with underperforming contracts can put a strain on any business. No one is immune. In that vein, it’s important that strong businesses keep the focus on constant improvement of operations, and reducing costs while continuing to provide great customer service.

For Blue Eagle Logistics, this means sticking to what we know well, while avoiding onerous contracts and service requests outside of our sandbox.  We communicate constantly with our team and our customers to make sure we know our craft, and we pay attention to the details, so we can execute completing each shipment efficiently and effectively.

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