The logistics and shipping industry continues to face significant challenges, with multiple companies seeking bankruptcy protection amid ongoing market pressures. The sector has been grappling with what’s known as the Great Freight Recession since March 2022, though recent indicators suggest potential signs of recovery.
Industry analysts have noted some positive developments, including an uptick in truckload rates and an increase in tender rejections to 6%, as reported by FreightWaves. This higher rejection rate indicates that trucking companies are becoming more selective when choosing between shipping requests, potentially signaling improving market conditions.
However, bankruptcies continue to impact the sector. Recently, SBB Shipping USA, a global logistics provider operating across North America, Asia, Europe, and North Africa, filed for Chapter 11 bankruptcy protection on December 14. The Lyndhurst, New Jersey-based company, which filed its petition in the U.S. Bankruptcy Court for the District of New Jersey, reported assets and liabilities ranging between $1 million and $10 million.
SBB Shipping USA provides comprehensive logistics services, including ocean freight, land transport, and e-commerce fulfillment solutions. The company serves diverse industries, ranging from aerospace and automotive to healthcare and retail, offering services such as less container load, full container load, and intermodal solutions.
This filing follows several other significant bankruptcy cases in the shipping industry. KAL Freight, based in Fontana, California, sought Chapter 11 protection on December 5 after defaulting on debt owed to approximately ten lenders. The company aims to wind down failing affiliates while restructuring its core business operations.
In another notable case, Miami-based Star Transportation PA and five of its affiliates filed for Chapter 11 reorganization on November 1, following a lender’s attempt to repossess 47 of their financed trucks.
Some companies have taken more drastic measures. Mighty Move Transportation, an Illinois-based shipping company operating 70 power units with 75 drivers, filed for Chapter 7 liquidation on October 24 in response to breach of contract lawsuits. Similarly, Irving, Texas-based Sunset Logistics and its affiliates opted for Chapter 7 bankruptcy on October 3, citing challenging economic conditions, depressed freight rates, and escalating operational costs.
While SBB Shipping USA’s bankruptcy petition doesn’t explicitly state the reasons for filing, industry observers note that shipping companies filing for bankruptcy in 2024 have consistently cited several common challenges. These include mounting debt obligations, rising interest rates, increased operational costs due to inflation, and declining demand for shipping services.
The company maintains a significant presence in the logistics sector, offering comprehensive services including warehousing and storage, inventory management, real-time order processing, and value-added services through its third-party logistics and fulfillment operations. Despite its current financial challenges, SBB Shipping USA’s Chapter 11 filing indicates an intention to reorganize rather than liquidate, suggesting a potential path forward for the company’s operations.
This wave of bankruptcies reflects the broader challenges facing the shipping and logistics industry, even as some market indicators suggest a potential easing of the freight recession that has dominated the sector since early 2022.