VIB Trans, Inc., an Illinois-based trucking company that operates a fleet of 29 trucks, has filed for Chapter 11 bankruptcy protection amid the Great Recession, the longest in trucking history. VIB Trans, headquartered in Wooddale, a suburb of Chicago, has hired 34 drivers to support its operations. The company began operating in 2018, according to federal safety records.
Chapter 11 bankruptcy allows businesses like VIB Trans to continue operating while they have a plan to repay debts and hopefully avoid a complete shutdown. The case comes at a tumultuous period for the shipping industry with several carriers succumbing to financial pressures. Due to the collapse of the industrial economy, the volume of truck transport has decreased by 18% compared to last year.
The trucking industry is going through very challenging times. Since 2019, more than 200,000 indirect commercial driver’s licenses have been issued, contributing to an influx of more than 310,000 trucks, flooding the market with excess capacity.
This excess capacity has turned the trucking industry into an economic backwater, where newcomers crowd out veterans and keep rates low. The looming expiration of SNAP funding could drive the bottom out of the market, as government aid has been a major driver of transit demand.
In early October, a major flatbed operator shut down operations, laying off 1,000 employees, including 600 drivers. An Alabama-based trucking company also filed for Chapter 7 bankruptcy, cutting another 1,000 jobs.
Smaller carriers like VIB Trans, with fleets of under 50 trucks, are particularly vulnerable in the current climate of high operating costs and low demand.
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