A Chapter 11 petition on January 12 is resulting in STG Logistics filing for bankruptcy. STG Logistics is the fourth-largest intermodal trucking company in the US with around 15,000 53-foot containers. The filing will reduce the over $1 billion debt by roughly 95% and provide $150 million in new capital. Given the significant cargo volume STG moved, the filing comes as a surprise. STG explained that this isn’t a shutdown, just a pre-negotiated plan to restructure the company. This article describes the reasons for the filing and how to protect your cargo during this time.
Why is STG Logistics Filing For Bankruptcy?
The primary reason for the Chapter 11 filing is prolonged weak freight demand. Over the last few years, the domestic shipping industry has seen a decline in demand. Following the growth during the coronavirus pandemic, demand slowed to the point that many trucking companies couldn’t keep up. STG followed the growth by acquiring various countries in 2022 and 2023. The Chapter 11 filing is to reorganize the company during this time of low demand. CEO Geoff Anderson stated, “The reorganization strengthens the company, which is working through one of the most severe freight recessions in history.” STG will continue to maintain service levels for customers and vendors and pay employees during the restructuring.
A1 Freight Solutions
Situations like a trucking company filing for bankruptcy can be alarming and potentially disrupt supply chains. While it should not stop cargo movement, shippers should still take the necessary steps to prevent disruption. Along with staying current with the news, this can be done by speaking with a freight broker like A1 Freight Solutions. Our brokers help you navigate domestic shipping by providing a network of carriers ready to move your shipment. We also offer services such as coordinating cargo movement, providing paperwork, finding rates, and more. Reach our brokers at info@a1wwl.com or 786-376-9420 to get a quote for moving your goods to the final destination.