Missouri trucking firm files for bankruptcy after USPS cuts contracts

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A Missouri-based trucking company, which contracted with the US Postal Service to transport the mail, recently ceased operations and filed for Chapter 7 bankruptcy.

Polo-based family-owned Rooney Trucking Inc. filed its petition with the US Bankruptcy Court for the Western District of Missouri on Monday.

Attorney Ryan Blay told FreightWaves that “fuel and labor expenses were certainly issues that affected Rooney Trucking Inc.”

“However, the biggest issue was the US Postal Service’s decision to eliminate some routes and cancel certain contracts,” Blay said. “The business could not operate profitably with a restricted income stream. This was the most important factor in deciding to declare the company bankrupt.”

In its filing, the trucking company claims it will not be able to fulfill its 14-month contract to transport U.S. mail within a 150-mile radius of Kansas City, Missouri, “due to the expected loss of personnel as a result of the USPS filing for bankruptcy and outages.”

Some smaller mail contractors have struggled to stay afloat since the USPS announced it was renewing its $6.6 billion contract program with private trucking fleets in 2019. The program, known as Dynamic Route Optimization, changed the way in which private carriers were paid, shifting from contract rates to paying trucking companies based on mileage. This led to consolidation among mail carriers that could serve a larger region and drove out some of the smaller private contractors in the industry.

Pursuant to the Chapter 7 petition, Rooney Trucking filed an appeal with the Postal Service’s Board of Contract Appeals on March 22.

In the filing, Rooney Trucking lists assets of up to $10 million and liabilities of $500,000 to $1 million. The company, which has up to 49 creditors, maintains that no funds will be available for distribution to unsecured creditors once the administrative fees have been paid.

The IRS is listed as the company’s largest unsecured creditor, owing nearly $200,000. The filing also lists the names of the truckers, but does not include possible wages owed to them.

The company, owned by Patrick and Dixie Rooney de Polo, was founded in 1955.

According to Rooney Trucking’s financials, its gross income from January 1 to the date of bankruptcy filing is $1 million. His petition states that the company earned almost $5.2 million in 2021 and around $5.7 million in 2020.

The 67-year-old trucking company had 37 drivers and 66 power units, according to the Federal Motor Carrier Safety Administration’s SAFER website.

Its trucks had been inspected 26 times and four had been taken out of service in a 24-month period, resulting in a 15.4% out-of-service rate, which is below the national industry average of about 21%, according to FMCSA data. .

Rooney’s drivers were inspected 26 times and none were taken out of service. The national average for drivers is around 5.9%. Rooney’s trucks were involved in three injury and five-trailer crashes during the same 24-month period.

A meeting of creditors is scheduled for June 10.

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