Steep insurance premiums lead another carrier to cease operations

HUDSON, Wisc. — A week ago, RCX Solutions of Little Rock, Arkansas, ceased operations in part due to skyrocketing insurance premiums resulting from a lawsuit against the company. Just seven days later, another carrier, 101 Transport, of Hudson, Wisconsin, has decided to follow suit. Tom Dahlberg, owner of 101 Transport, said increasing insurance premiums and maintenance cost forced his hand
In an interview with Freightwaves, Dahlberg said, “Insurance is making it untenable to do business.” For 101 Transport, the point of “untenable” was reached after one of his company’s trucks was involved in a serious accident in Utah. Following the accident, 101 Transport saw its insurance premiums increase by 70%. “The government has got to step in on this issue before more companies go out of business,” he said.
Dahlberg said he founded 101 Transport in 2007, and the company’s mission could be summed up in three words, “back to basics.” The basics for 101 Transport, in a longer, 14-word format, are “pick up and deliver freight on time, bill it correctly and do it safely.”
While RCX Solutions was a comparatively small carrier, Transport 101 employed 72 company drivers and owned a similar number of trucks. When Dahlberg saw his insurance premiums increase last fall, he had to cut back operations to remain financially solvent. At that time, he prepared for what he saw as inevitable by laying off drivers and returning equipment. He turned to owner-operators as a substitute and had contracts with 32 haulers when he decided to close business.
Dahlberg said his company was trying to trim costs and maintenance expenses, but maintenance averaged $10-15,000 every time a truck required repairs. Those costs, coupled with insurance rates, outweighed what it took to keep 101 Transport a sustainable company in a period of uncertainty in the freight markets.
Great West Casualty Company, the insurance carrier providing liability coverage for 101 Transport, insured the company for $1 million, well above the required $750,000. Information from the U.S. Department of Transportation indicates that coverage was canceled effective March 1, 2020. DOT also indicates 101 Transport lost its authorization as a contract carrier effective March 9. The DOT database lists the reason as “involuntary revocation.”
Based on the contents of the 101 Transport website, the company placed a priority on taking care of its drivers “It’s not about hauling freight; it’s about people hauling freight,” is the homepage slogan and the company’s testament to its commitment. With owner-operators having replaced company drivers, 101 Transport offered three promises in its recruitment efforts: great miles, home time, and respect.  The company claimed its owner-operators averaged 135,000 miles annually, could get home time when they wanted or needed it, and stated that its drivers were a top priority. In 2018, company drivers combined for a reported 7.9 million miles.
Drivers were informed of the pending closure on February 29, Dahlberg said. By that date, he had cut all company drivers and contracted with 32 owner-operators. And based on what has happened since Dahlberg announced 101 Transport’s closing, the company commitment to drivers rings true.
Dahlberg said another carrier, which cannot be named at this time, has agreed to hire all owner-operators working under contract with 101 Transport. He said that assuming the drivers pass mandated background and safety checks, their unemployment window will be brief. In fact, most are expected to be driving for the new carrier as early as Wednesday (March 11, 2020).
101 Transport was primarily involved in hauling general freight, beverages, and paper items. It also contracted with the U.S. Postal Service to deliver mail to various postal destinations.
The closure of 101 Transport represents an ongoing trend in the trucking industry that saw well over 800 carriers cease operations in 2019. Recent closures also include BK Transport of Arlington Heights, Ill.; Howard Baer, Inc. of Nashville, Tenn.; Cold Carrier Logistics and its three affiliated company of Lakeland, Fla.; and both California’s Michael Dusi Trucking, Logistics, and warehousing and Rodgers Trucking.
In comparison to 2019 closures including Celadon and Fleetwood Transportation, the five carriers listed are but a few blips on the carrier closings and bankruptcies radar screen. But, as the number of companies ceasing operations since January 2019 nears 1,000, the collective impact could soon reach what analysts consider “crisis levels” in the trucking industry.

The Trucker News Staff

The Trucker News Staff produces engaging content for not only TheTrucker.com, but also The Trucker Newspaper, which has been serving the trucking industry for more than 30 years. With a focus on drivers, the Trucker News Staff aims to provide relevant, objective content pertaining to the trucking segment of the transportation industry. The Trucker News Staff is based in Little Rock, Arkansas.