Downers Grove, Illinois-based Roadrunner Transportation Systems has announced the closure of five terminals, a major reduction in force, and a 50% downsizing of its Little Rock, Arkansas-based Rich Logistics “dry van” business. The closure of the five locations will result in the layoff of approximately 450 truck drivers and support positions.
Approximately 450 truck drivers and employee positions will be eliminated after Roadrunner Transportation Systems notified workers on September 30, 2019, that the company is closing five terminals and significantly reducing its workforce at five locations. Locations impacted include Dallas, Texas, El Paso, Texas, Van Ormy, Texas, Little Rock, Arkansas, and Nashville, Tennessee.
Curt Stoelting, Chief Executive Officer of Roadrunner, noted “the decision to downsize the dry van business is a significant step in executing our strategy to emphasize our value-added logistics and asset-light LTL segments and increase our returns on invested capital. We factored in the impact of this downsizing as part of the strategic review of our Truckload segment. We believe downsizing the dry van business will improve operating margins and cash flow, reduce lease obligations and debt, improve internal controls and allow greater focus on the significant value-creation opportunities within our other businesses.”
Rich Logistics’ President, Shannon Everett, added: “My thoughts and prayers go out to our employees and their families that have been impacted by this restructuring, a decision that we feel was necessary given the growing forces that are currently being exhibited throughout the NAFTA trade lanes.”
Roadrunner, the parent corporation posted a $142 million loss in the second quarter of 2019. The company is involved in a financial scandal that led to a federal indictment of three of its former executives in an alleged accounting and securities fraud case that was discovered in May 2017. The company is also dealing with a $37 million lawsuit in which Arkansas-based PKE Western Truck Leasing alleges a breach of contract.
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