Missouri trucking firm documents for bankruptcy immediately after USPS cuts contracts

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A Missouri-primarily based trucking company, which contracted with the U.S. Postal Company to haul mail, recently ceased functions and filed Chapter 7 personal bankruptcy.

Spouse and children-owned Rooney Trucking Inc., headquartered in Polo, filed its petition in the U.S. Individual bankruptcy Court docket for the Western District of Missouri on Monday.

Legal professional Ryan Blay advised FreightWaves that “fuel and labor costs were being certainly problems that influenced Rooney Trucking Inc.”

“The bigger difficulty, however, was the final decision by the U.S. Postal Services to choose away some routes and terminate particular contracts,” Blay mentioned. “The organization couldn’t functionality profitably with a limited cash flow stream.  This was the greatest aspect in selecting to declare personal bankruptcy for the corporation.” 

In its submitting, the trucking business states it will be not able to satisfy its 14-thirty day period contract to haul U.S. mail within a 150-mile radius of Kansas Metropolis, Missouri, “due to envisioned loss of team as a result of bankruptcy submitting and prior cuts to company from USPS.” 

Some more compact mail contractors have struggled to stay afloat since the USPS declared it was revamping its $6.6 billion contract plan with private trucking fleets in 2019. The plan, acknowledged as Dynamic Route Optimization, altered the way personal carriers had been paid — switching from agreement rates to having to pay trucking businesses on a mileage foundation. This led to consolidation amid mail hauling firms that could support a more substantial region and squeezed out some of the more compact private contractors in the market.

In accordance to the Chapter 7 petition, Rooney Trucking filed an enchantment with the Postal Assistance Board of Agreement Appeals on March 22. 

In the submitting, Rooney Trucking lists its property of up to $10 million and liabilities of $500,000 to $1 million. The enterprise, which has up to 49 collectors, maintains that no funds will be out there for distribution to unsecured collectors soon after administrative service fees are paid out.

The IRS is detailed as the company’s major unsecured creditor, owed nearly $200,000. The submitting also lists the names of the truck motorists, but does not incorporate the doable wage quantities they are owed. 

The enterprise, owned by Patrick and Dixie Rooney of Polo, was launched in 1955. 

In accordance to Rooney Trucking’s financials, its gross revenues from Jan. 1 right up until its individual bankruptcy submitting date are $1 million. Its petition states the organization built virtually $5.2 million in 2021 and about $5.7 million in 2020.

The 67-yr-aged trucking corporation experienced 37 drivers and 66 ability units, in accordance to the Federal Motor Carrier Security Administration SAFER web-site.

Its vans had been inspected 26 times and four had been placed out of service in a 24-thirty day period interval, ensuing in a 15.4% out-of-company price, which is under the industry’s national average of all over 21%, according to FMCSA data. 

Rooney’s motorists have been inspected 26 periods and none ended up put out of company. The national regular for drivers is about 5.9%. Rooney’s trucks have been concerned in three personal injury crashes and five towaways about the exact 24-thirty day period period of time.

A assembly of collectors is scheduled for June 10.

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